Roanoke is a city in western Virginia. It is an independent city that has a population of just over 100,000, which makes Roanoke the eighth biggest city in Virginia. Roanoke is the biggest city in southwestern Virginia and is the biggest city west of Richmond in the state. Roanoke has a couple of nicknames, including “The Star City of The South,” “Magic City,” and “Star City.” It is a commercial hub of much of Southwest Virginia and is known for having the Roanoke Star. Since Roanoke is located in a mountainous region of Southwest Virginia, it also has a nickname as the “Capital of the Blue Ridge.”
According to Niche, Roanoke is a city that gives people a dense suburban feel. It’s a place most people own their homes, and it is a diverse place where there are tons of parks and restaurants. Roanoke is home to many young families and young professionals, as well as many above average public schools. It has a median home value of $135,100 and a median rent of $814.
As of May 2022, Roanoke is a seller’s market. It is a place where demand is exceeding supply and where real estate investors are getting into bidding wars over prime real estate in the city, as well as the surrounding metropolitan area. Roanoke is a city where homes are selling fast and for higher than listing price.
Real estate investors in Roanoke would benefit from hard money loans. Hard money loans are an alternative source of financing that are used for fixing homes in disrepair and turning them into attractive properties. Often, hard money loans are used for fix and flips, long-term rentals, and construction projects. Their biggest advantage in a seller’s market like Roanoke is their very fast speed of approval. Hard money loans can be approved is a couple of days, whereas traditional mortgage loans take a month or more to be approved. This incredibly fast speed of approval gives real estate investors a competitive edge compared to people who use traditional financing.
The reason hard money loans can be approved so quickly is that they’re based on the property, not the financial standing of the borrower. Hard money loans require a credit score of 600 to 620 as a minimum, and a good credit score certainly does not hurt in the sense that they can help hard money lenders get lower interest rates and otherwise favorable terms. But hard money loans use the property as collateral.
If a borrower defaults on a traditional mortgage loan, the bank initiates the foreclosure process which can decimate a borrower’s credit score. However, if a borrower defaults on a hard money loan, the lender takes on the property and becomes the homeowner in a very expedient process. Hard money lenders need to be prepared for this possibility.
This means hard money loans are inherently very risky. They have higher interest rates, shorter repayment periods, and lower LTV ratios than traditional mortgage loans. They have interest rates of 8–15%, which are significantly higher than the interest rates of just over 4%. They have repayment periods of around a year, which are significantly lower than the repayment periods of traditional mortgage loans (15 to 30 years).
It’s important to get the best terms and rates for your hard money loans. That’s why we at Hard Money Lenders IO have made a list of the best hard money lenders in Roanoke.