Portsmouth is an independent city in southeastern Virginia that is in southern Virginia. It’s very close to Norfolk and Hampton Roads, and it is home to many U.S. Navy facilities like the Norfolk Naval Shipyard and Naval Medical Center Portsmouth. It has a population of just under 98,000 people, and is known for being right on the water with the Elizabeth River. Portsmouth is also known for its temperate weather year round.
According to Niche, Portsmouth is a very diverse city with a dense suburban feel. It is a very diverse city where most people own their homes. There are many parks in Portsmouth, and it is home to many young professionals and families. Right now, Portsmouth has a median home value of $170,900 and a median rent of $1,048.
As of May 2022, Portsmouth is a seller’s market. It’s a place where demand is outpacing supply and where real estate investors are getting into bidding wars over the best property in the city. Like the rest of the country during the pandemic, Portsmouth is in a housing bubble where homes are selling fast and for higher than listing price.
Hard money loans might be the best way to invest in real estate in Portsmouth. Hard money loans are also known as last resort loans and short-term bridge loans, but their biggest advantage in a seller’s market like Portsmouth is their very fast speed of approval. Traditional mortgage loans might take a month or more to be approved, but hard money loans usually need a couple days to be approved, which is a significant advantage in a seller’s market like Portsmouth.
The reason hard money loans can be approved so quickly is because they’re based on the property as the asset, not the credit score of the borrower. While traditional mortgage loans rely a lot on the credit score of the borrower, hard money loans only rely on them for credit score minimums — most hard money lenders require a credit score of 600 to 620. Obviously, a good credit score does not hurt, as the majority of hard money lenders will give lower interest rates to borrowers with good credit.
However, hard money loans use the property as collateral. If a borrower defaults on a mortgage, the bank foreclosures on the property in a very costly procedure. However, if a borrower defaults on a hard money loan, the lender takes on the property in a very swift process. Hard money lenders need to be prepared for the possibility of becoming the homeowner themselves and being able to make a profit from the property.
This is an inherent risk, and there are also a lot of disadvantages associated with hard money loans. Hard money loans have higher interest rates, shorter repayment periods, and lower LTV ratios than traditional mortgage loans. Hard money loans have interest rates of 8–15%, which are significantly higher than the interest rates of mortgages. They also have repayment periods of more or less a year, which are much shorter than the repayment periods of traditional mortgage loans. Lastly, since hard money loans have lower LTV ratios, investors who use hard money loans usually need to put down higher down payments.
Not every hard money lender is trustworthy, and you need to get the best terms and rates possible. That’s why we at Hard Money Lenders IO have made a list of the best hard money lenders in Portsmouth.