Lexington is best known as the home of the University of Kentucky, a powerhouse in collegiate sports and one of the best universities in Kentucky. It is one of the best college towns in the country with an incredibly robust nightlife, as well as the second biggest city in the state of Kentucky. According to Jeff Rohde at Roofstock, Lexington is a “sizzling” real estate market with real estate prices that are hitting consistent highs. Demand for real estate is incredibly high, and homes are selling very fast.
With the big city of Louisville 74 miles away, Lexington has a reputation beyond simply being a college town. It is known for being the Horse Capital of the World with many famous racecourses. It has many terrific employers, including IBM, Lexmark International, and Amazon. It is also known for its music, being home to the Festival of the Bluegrass every year.
Like the rest of Kentucky, Lexington is known for having a terrific quality of life and a low cost of living. As of now, Lexington is a seller’s market with median sales prices soaring. There is a massive shortage of homes compared to demand. Demand is outpacing supply and median home prices are going up rapidly, so now is the time to invest in Lexington, Kentucky without missing out.
Hard money loans might be the best way to invest in real estate in Lexington. Otherwise known as bridge loans or last resort loans, hard money loans are advantageous in a competitive seller’s market for their fast speed of approval. They can be approved in a couple of days, if not sooner by most hard money lenders, which make investors using hard money loans instantly competitive.
Compared to traditional loans, hard money loans are approved much quicker. Most traditional bank loans take at least a month to get approved. They also depend significantly on the financial standing of the applicant, or the credit score of the borrower. Hard money loans barely factor in credit, merely requiring a minimum credit score of 600 to 620.
Instead, the rates are based on the property and the after-repair value of a property. Hard money loans are mostly used for repairing foreclosed or distressed properties, construction projects, fix and flips, and long-term rentals. They use the property as collateral rather than the credit of the borrower. If a hard money loan is defaulted on by the borrower, the lender takes on the property, which is a very risky proposition: a hard money lender needs to make sure the property can pay off a hard money loan by itself.
Because of this risk, hard money loans also come with plenty of cons. They have very high interest rates of 8–15%. They have short repayment periods, often of a year. They also have low LTV ratios compared to mortgages, which means hard money loans require higher down payments than traditional loans. If a real estate investor does not have a good strategy for paying off a hard money loan, it’s very easy to default on the loan.
It’s important to only trust reliable and trustworthy hard money lenders. Some might tack on extraneous fees.
However, at Hard Money Lenders IO, we did the research so you don’t have to. Here are the best hard money lenders in Lexington, Kentucky, so you can make a competitive offer in a rapidly soaring market.