Kingsport is a city located within two counties of Tennessee — Sullivan and Hawkins counties. It has a population of just over 55,000 people, according to the 2020 census. Kingsport is included in the Mountain Empire, which is part of a group of mountainous places in southwestern Virginia and northeastern Tennessee. Kingsport also has a large metropolitan area, and since it got its name from being the head of navigation for the Tennessee Valley.
According to Niche, Kingsport is one of the best places to live in Tennessee. It gives its residents a dense suburban feel and is a place where most people own their homes. There is lots of green space in Kingsport, and the town is home to many retirees and young professionals. It’s also home to many great public schools. Kingsport has a median home value of $145,800 and a median rent of $655.
Right now, Kingsport, as well as the other two cities nearby cities, Bartlett and Johnson City, is a seller’s market. It is a place where demand is outpacing supply and real estate investors are getting into bidding wars over the best real estate in Kingsport. Homes are selling fast and for higher than listing price.
Hard money loans might be the best way to invest in real estate in Kingsport. Hard money loans are also known as short-term bridge loans and last resort loans, but their biggest advantage in a seller’s market like Kingsport is their very fast speed of approval. Hard money loans can be approved in a couple of days, whereas traditional mortgage loans take a month or more to be approved. The very fast speed of approval of hard money loans is a major advantage because it can help real estate investors put down bids faster.
Hard money loans can be approved so quickly because they’re an alternative source of financing to traditional mortgage loans. They use the property as the asset, as opposed to the financial standing of the applicant. It’s not like financial standing does not matter, as most hard money lenders require minimum credit scores of 600 to 620, and a good credit score helps real estate investors get lower interest rates.
However, hard money loans use the property as collateral. If a borrower defaults a mortgage, the bank forecloses on the property. But if a borrower defaults on a hard money loan, the lender automatically becomes the borrower. This is a possibility every hard money lender prepares themselves for, since they can make great profit flipping the property themselves, but they can also lose significant funds as well.
Because of this, hard money loans also have lots of risks and disadvantages. They come with higher interest rates, shorter repayment periods, and lower LTV ratios than traditional mortgage loans. Hard money loans have interest rates of 8–15%, repayment periods of around a year, and LTV ratios of 65–75%, all of which are significantly more unforgiving than the terms and rates of traditional mortgage loans. By contrast, mortgages have (on average) interest rates of about 4%, repayment periods of 30 years, and LTV ratios of 80%.
It’s important to only trust the best hard money lenders. Not every hard money lender is trustworthy. Some hard money lender might tack on extra fees and points in origination fees, closing costs, and underwriting fees.
That’s why we at Hard Money Lenders IO have compiled a list of the best hard money lenders in Kingsport for your real estate transaction.