Mobile is the oldest city in Alabama as well as a very predictable and stable housing market. As a city on the Gulf Coast, Mobile has a population of 187,000 people and more than 414,000 people in the metropolitan area. Mobile is the fourth largest city in Alabama with a low cost of living and doing business.
Right now, the housing market of Mobile is surging with high prices and home values. It is also one of the best places to rent in the country, and a terrific market for real estate investors to get into long-term rentals. Rent prices have been rapidly increasing, as have home prices.
It is one of the most affordable metropolitan areas to buy a home. It is also one of the most educated workforces in the country with top-ranking schools.
For funding many of these long-term rentals, hard money loans are some of the best options at your disposal. They can also be used for construction projects, fix and flips, and the purchase and repairs of distressed properties and foreclosed homes.
Hard money loans are very quick to approve compared to traditional loans. Since the field is more unregulated than traditional lending from banks, hard money loans can be approved in a couple of days, compared to the months-long process that can accompany applying for a traditional loan.
A low credit score can often be a barrier to being approved for a traditional loan, or in getting the best rates possible. With hard money loans, you don’t have to worry about credit being a barrier (although most hard money lenders require a minimum credit score of 600 or 620).
The hard money loan is dependent on the projected value of the property after repairs and relies on the property as collateral instead of the borrower’s credit. This means if you default on a hard money loan, the lender takes the property without the hassle of foreclosure proceedings.
However, there are drawbacks to a loan that can be approved in a couple of days. Hard money loans have higher interest rates, lower LTV ratios, and short repayment periods. They are mostly used for real estate transactions rather than traditional homeownership.
Sometimes, in real estate investing, speed of approval is more important than other metrics like interest rates and repayment periods. This is a new approach to investing known as asset-based investing.
While it’s not hard to get a hard money loan in Mobile, it’s important to be careful because some hard money lenders are untrustworthy, tacking on extraneous costs like origination fees, which new real estate investors can be particularly vulnerable to.
However, we have researched and found the best hard money lenders in Mobile. These are reputable and trustworthy lenders that will get you the best rates and consultation possible.