Lakewood is a suburb in Ohio right outside of Cleveland. As part of the Greater Cleveland Metropolitan Area, Lakewood is the third biggest city in Cuyahoga County. It is home to many young professionals and has a very diverse population.
It is considered one of the best places to live in Ohio, giving people a suburban feel. It is a very liberal city that is known for its restaurants, coffee shops, parks, and more. It is known for its terrific public schools.
Most people in Lakewood rent their homes, which makes it a terrific rental market. Lakewood is also a very affordable place to live. It has a median home value of $158,100 and a median rent of $797, which are both well below national averages.
Right now, Lakewood is a very strong seller’s market, which means demand is rapidly outpacing supply. Homes are selling for greater than asking price in Lakewood, and are selling faster than average.
Hard money loans might be the best way to invest in real estate in Lakewood. Hard money loans are also known as short-term bridge loans or last resort loans, and are primarily used for real estate transactions.
They are mostly used for fix and flips, long term rentals, repairs of distressed properties, and construction projects. The biggest advantage of a hard money loan is its fast speed of approval, where hard money loans can be approved after a couple days.
However, traditional loans from banks can take at least a month to be approved. The reason hard money loans can be approved so quickly is that they’re based on the property, not the financial position of the applicant. While most hard money lenders still require minimum credit scores of 600 to 620, hard money loans are dependent on the after repair value of the property. If the borrower defaults on the loan, the hard money takes on the loan in hopes of the property paying off the hard money loan.
This fast speed of approval is particularly advantageous due to the need for putting down a fast offer. Especially in a competitive market like Lakewood, it’s especially important to put down money quickly to be competitive with other buyers.
Hard money loans have their risks as well. They have lower LTV ratios, shorter repayment periods, and much higher interest rates compared to traditional financing. They often have an average interest rate of 8–15% and need to be paid off in a year, which can be difficult compared to 15 to 30 year mortgages from banks. Hard money loans can be hard to pay off if the real estate investor does not have a good strategy to pay off the loan.
For these reasons, many people suggest leaving hard money loans to the professionals. Not everyone should get a hard money loan, and particularly new investors need to be careful to find good lenders because many hard money lenders require a successful track record of real estate investing. It’s important to be especially careful with hard money loans because not every hard money lender is trustworthy and some will tack on extraneous fees like origination fees, underwriting costs, and closing costs.
At Hard Money Lenders IO, we have you covered in finding the best hard money lenders in Lakewood. We have done the research so you don’t have to: here are the best partners in your real estate financing journey.
