North Carolina is a terrific place to invest in real estate. It has a lot of terrific universities in the University of North Carolina, as well as Duke University, which makes it a haven for research and academia. The “Research Triangle” of Durham, Chapel Hill, and Raleigh are all great places to live with a quality lifestyle and low cost of living. But there are other great places to ivnest in real estate besides academic havens. Charlotte is also a terrific place to invest in real estate as the biggest city in the state. Fayetteville, home to Fort Bragg, employs many people working in defense.
Throughout North Carolina, there are employers in healthcare, IT, energy, and defense. North Carolina’s affordability is greatly helpful for investors. It is a very affordable palace to buy a home, especially compared to more northern states. There are major urban areas on coasts with lots of universities, but there are also mountain areas like Asheville. With major expressways to connect the whole state, North Carolina connects all its cities and suburbs in a very accessible manner.
Right now, much of North Carolina is a seller’s market. It is a place where demand is outpacing supply, and a housing bubble where real estate investors are getting into bidding wars over the best real estate in the state. Across the state, great affordability, quality of life, and job opportunities are drawing a lot of investors to North Carolina.
Hard money loans might be the best way to invest in real estate in North Carolina. Hard money loans are a form of financing used for real estate transactions like fix and flips, long-term rentals, and construction projects. Hard money loans are also known as short-term bridge loans and last resort loans. Their biggest advantage in seller’s markets and housing bubbles all across North Carolina is their very fast speed of approval. Hard money loans can be approved in a couple of days, whereas traditional mortgage loans can take a month or more to be approved. This speed of approval is as important as money in a seller’s market so investors can be competitive for selective properties.
The reason hard money loans are so different from mortgages is they’re based on the property, not the financial standing of the borrower. The credit score of the borrower matters in the sense that lenders require a minimum credit score of 600 to 620, and good credit is always a benefit because it helps investors get better interest rates. Hard money loans use the property as collateral. If a borrower defaults on a hard money loan, the lender becomes the homeowner in a very fast process. Every hard money lender prepares themselves for this possibility before approving a loan.
This means hard money loans have lots of cons and disadvantages, which are reflected in the terms and rates of loans. Hard money loans have higher interest rates, shorter repayment periods, and lower LTV ratios than traditional mortgage loans. They have interest rates of 8–15%, which are much higher than the interest rates of traditional mortgage loans (just over 5% on average). Hard money loans also have repayment periods of more or less a year, which are much shorter than repayment periods of traditional mortgage loans. Lastly, hard money loans have lower LTV ratios so require higher down payments from borrowers.
It’s important to only trust the very best hard money lenders, so without further ado, here are the best hard money lenders in North Carolina.