Owensboro, Kentucky is a suburb in Daviess County, Kentucky. It has a population of about 60,000 people and borders Evansville, a city on the border with Indiana. It is the fourth biggest city in Kentucky, and Owensboro is also known as the “BBQ Capital of the World.”
Right now, Owensboro is a seller’s market. That means demand outpaces demand for housing at Owensboro, and the median days on market for an average home in Owensboro in the past three years was 48 days. Homes in the city are also selling for greater than listing price.
As a seller’s market, Owensboro is a very competitive market. It’s important to get an offer in quickly to compete with other buyers for properties.
Hard money loans might be the best way to get enough cash and money to buy homes in Owensboro. They are known for having very quick approval speeds, and hard money loans can be approved in a couple of days, whereas traditional loans from banks can take up to a month or more to be approved. They don’t require knowing good credit, although the majority of hard money lenders still require a minimum credit score of 600 to 620. Hard money loans can also be assets to people who were not approved in getting a loan through traditional means.
Instead, hard money loans are short-term, non-conforming loans that don’t come from traditional lenders, but private lenders. Instead, they are based on the property, and use the property as collateral for a loan. If a borrower defaults on a traditional loan, the bank forecloses the property in a very lengthy judicial process that’s very costly. However, if a borrower defaults on a hard money loan, the hard money lender collects the property. This means hard money lenders calculate whether the property can pay off the hard money loan.
Hard money loans provide fast money, and are primarily used in real estate transactions for investors looking to fund fix and flips, long-term rentals, construction projects, and repairs for distressed or foreclosed properties. Due to the added risk for the lender, hard money loans have significant disadvantages, too.
They have high interest rates, require larger down payments, and have short repayment periods. Hard money loans also may require a successful real estate investment history, which might make them inaccessible for new real estate investors. Molly Grace at Rocket Mortgage recommends leaving hard money loans to the professionals as a result, since new investors can be taken advantage of so easily.
Hard money loans can be very difficult to pay off if a real estate investment does not work out. With unforgiving interest rates and repayment periods, real estate investors using hard money loans have to be very careful and very savvy about how they will pay off the loans.
It’s important to be especially cautious with hard money loans as a result. Some hard money lenders can be untrustworthy and tack on extra fees like origination fees and closing costs to exploit investors, especially new investors. It’s important to do your research and consult the experts.
At Hard Money Lenders IO, we have you covered. We have compiled a list of the best hard money lenders in Owensboro so you can find a real estate investing partner for the property of your dreams.