Smithtown is a suburb in Suffolk County, Long Island and a terrific place to live. On the North Shore of Long Island, Smithtown is about an hour away from New York City (depending on traffic), accessible to New York City by train, and has a population of over 115,000. Smithtown is a terrific place to raise a family and has terrific schools, well known for both Smithtown East High School and Smithtown West High School. It is also extremely close to Stony Brook University, and many commuters to the popular SUNY school live in Smithtown.
According to Niche, Smithtown is one of the best places to live in New York. It gives residents a sparse suburban feel and is a place where most people own their homes. It has a robust nightlife through bars and restaurants to complement its family-friendly nature, and is a very safe place to live. Smithtown has a median home value of $486,300 and a median rent of $1,793, which makes it an expensive place to live, but not far off the average New York City suburb.
Real estate prices have been appreciating rapidly in Smithtown in recent years. Smithtown is a neutral housing market, which means supply and demand are comparable, and homes are usually staying on the market for a typical length of time. In this housing bubble, real estate investors might be getting into bidding wars for the best real estate in town.
Real estate investors in Smithtown should consider hard money loans as one of the best ways to invest in real estate in the market. Hard money loans are known for repairing homes and flipping houses, but they’re also used for other real estate transactions like long term rentals. Hard money loans have a huge advantage of fast speeds of approval. While traditional mortgage loans can take a month or more to be approved, hard money loans can be approved within a couple of days.
These loans use the property as the collateral and asset the loan is based on. Hard money loans use the projected after repair value of the home as the basis for the terms and rates of a loan. Since hard money loans use the property as collateral, the default process is different for hard money loans and traditional mortgage loans. Mortgage loans have notorious foreclosure processes where the bank initiates a foreclosure, while hard money lenders take on the property if a borrower defaults on a hard money loan.
The reason the process is a lot more expedient for hard money loans is because of the riskier asset, and there are plenty of drawbacks to these loans as well. Hard money loans have shorter repayment periods, higher interest rates, and lower LTV ratios than traditional mortgage loans. Hard money loans have interest rates of 8–15%, repayment periods of around a year, and LTV ratios from 65–75%. By contrast, traditional mortgage loans have interest rates just above 4%, repayment periods of approximately 30 years, and LTV ratios around 80%.
It’s essential real estate investors, particularly new real estate investors, are selective with which hard money lenders they choose. Not every hard money lender is trustworthy. Some might tack on extraneous fees or just not be transparent about fees like closing costs, origination fees, and underwriting fees. New investors might have trouble getting a lender because most hard money lenders require a successful track record of fix and flips.
At Hard Money Lenders IO, we have researched a list of the best real estate investors in Smithtown, so you don’t have to. Here are the best hard money lenders in the town.
