Ohio is a midwestern state in the Great Lakes region, and it is known around the world for its higher education. It has some of the best universities and colleges in the world. It is known for its manufacturing industry historically, and it is an attractive place to invest in real estate. Besides manufacturing, health care and energy are burgeoning industries.
Ohio is a state with a thriving economy, with the seventh-highest GDP in America, home to many Fortune 500 companies. There are plenty of cities where real estate investing in Ohio is advantageous, including Columbus, Cleveland, Dayton, and Toledo.
In particular, the rental market is thriving in Ohio. Between workers and students, there is incredible demand for rentals within the state, which provides real estate investors an opportunity for terrific cash flow. Right now, many people are moving to Ohio. The population has been growing steadily, and the job market is also growing. Ohio is also known for its terrific cost of living — compared to the rest of the country, Ohio is a very affordable state. In 2021, the average mortgage payment was $765 a month, which is must less than the average mortgage payment of $1,159.
Hard money loans might be the best way to invest in real estate in Ohio. These loans are otherwise known as last resort loans, but they are predominantly used for fix and flips, long-term rentals, repairs for distressed properties, and construction projects. Hard money loans don’t always count as cash, but they do qualify as cash for cash only properties that do not qualify for traditional financing.
Right now, hard money loans have the big advantage of a very quick speed of approval. Hard money loans can be approved within a couple of days, as opposed to the month or more traditional financing can take. While traditional loans depend on the credit of the borrower, hard money loans are based on the property. That doesn’t mean credit doesn’t matter, since hard money loans often require minimum credit scores of 600 to 620.
However, hard money loans also use the property as collateral. The terms and rates of a hard money loan use the after repair value of the property as their basis. If a borrower defaults on a mortgage, the bank takes on the loan in a foreclosure process that can be very expensive and lengthy. However, a borrower defaulting on a hard money loan is a very quick process. The lender takes on the property in hopes the property can pay off the hard money loan.
This makes hard money loans incredibly risky. They have lower LTV ratios than traditional loans, which means they require larger down payments than traditional loans. They have higher interest rates than mortgages, usually of 8–15%. They also have shorter repayment periods (usually of a year) compared to 15 to 30-year mortgages.
This means hard money loans can be hard to pay off if the investor does not have a good strategy. It’s also very difficult for new investors to get hard money loans because most lenders require a successful track record of real estate investments. It’s very important to only trust the best hard money lenders since not every lender is trustworthy.
At Hard Money Lenders IO, we have you covered. Here are the best hard money lenders to fund your real estate investors in Ohio.