Right now, Schenectady, New York is a booming real estate market. According to the Times Union, real estate prices have been skyrocketing from the pandemic.
Schenectady is a city in upstate New York and the county seat of Schenectady County. It is the ninth biggest city in New York state and is in the same metropolitan area as Albany. It is known as “the city that lights and hauls the world.” Today, Schenectady is known for being home to many emerging technologies and renewable energy industries. General Electric has historically been a very large employer in the state.
According to Niche, Schenectady has a population of approximately 65,000 people. It gives residents a suburban feel, and gives a dense suburban feel and most residents in Schenectady rent their homes. There are a lot of restaurants, coffee shops, and parks, and most families and young professionals live in the city. It is considered a very diverse place and great place to raise a family.
Schenectady is a very affordable place to live and invest in real estate. It has a median home value of $108,700, and a median rent of $904. Right now, Schenectady is a seller’s market. It is a housing bubble where real estate investors are getting into bidding wars over prime real estate. Supply is rapidly outpacing demand in Schenectady.
Right now, hard money loans might be the best way to invest in real estate in Schenectady. Hard money loans are otherwise known as short-term bridge loans or last resort loans. They are mostly used for real estate transactions like fix and flips, long-term rentals, and construction projects. They are mostly used to repair properties in poor condition.
Hard money loans have a huge advantage in a seller’s market like Schenectady: they can be approved very quickly. They can be approved in a few days, whereas traditional mortgage loans take more or less a month to be approved.
These loans can be approved so quickly because they’re based on the property and after-repair value of the property. This means hard money loans aren’t as regulated as mortgages, but they also use a different asset that doesn’t depend as strongly on financial standing as mortgages. Hard money loans still require a minimum credit score of 600 to 620, but they use the property as collateral. If a borrower defaults on a hard money loan, the lender takes on the property. If a borrower defaults on a mortgage, the bank initiates a foreclosure.
This means although hard money loans can be approved very quickly, they have tremendous risks for lenders. This manifests itself in high-interest rates of 8–15%, which is much higher than the average interest rates of traditional mortgage loans (just over 4% on average). It also results in much shorter repayment periods of more or less a year (compared to 30-year repayment periods of mortgages). Lastly, it results in higher LTV ratios, which means hard money loans have to put down higher down payments than traditional mortgage loans.
For real estate investors, it’s important to choose only the best hard money lenders. New investors in particular might have to rely on financial standing and credit score to make themselves more appealing borrowers — the vast majority of hard money lenders are reluctant to give to new investors because they don’t have experience as investors.
Hard Money Lenders IO has compiled a list of the best hard money lenders in Schenectady. These are the best hard money lenders in the city.