South Bend is one of the biggest cities in Indiana, and has been a rapidly growing and thriving real estate market. According to Jeff Rohde at Roofstock, the South Bend metropolitan area is known for being home to Notre Dame University and the “cultural and economic hub of Northern Indiana.” On average, a home has less than five weeks of inventory on the market, and median sales prices have been rapidly increasing over the past several years.
In South Bend, the economy is driven by education, healthcare, tech, and the service industry. It has seen significant recent population growth, and the city right now is home to over 100,000 residents. The unemployment rate of South Bend is decreasing, and South Bend is growing increasingly in demand as a place to live.
Niche says South Bend has a dense suburban feel, and is home to many young families and young professionals. Its public schools are above average, and most people in the city own their homes. South Bend is a very affordable city — its median home value is $85,200 and its median rent is $789.
This makes South Bend a great city to invest in real estate as a city with one of the lowest costs of living in America. However, right now it’s hard to buy real estate in South Bend. It is a seller’s market, which means demand is outpacing supply for housing in the city. Bidders have to get offers in very quickly to meet demand.
Hard money loans might be the best way to invest in real estate in South Bend. Otherwise known as last resort loans, in a seller’s market, hard money loans have a tremendous advantage of being approved in a couple of days, as opposed to traditional mortgage loans which can take at least a month to be approved. Hard money loans are primarily used for real estate transactions, and mostly used for fix and flips, long term rentals, and construction projects.
Hard money loans can be approved so quickly because they’re based on a different asset than mortgages. Mortgages are based on the credit score of the borrower and the financial standing of the applicant. Hard money loans are not (despite most lenders having minimum credit scores of 600 to 620). Hard money loans are based on the property, not the credit score of the borrower. Since the property is the collateral, if a borrower defaults on a hard money loan, the lender takes on the property. This means hard money lenders have to determine whether the property can pay off the loan itself, and sometimes, hard money lenders can make a tremendous profit if the borrower defaults.
However, because of this, hard money loans are inherently risky. They’re called last resort loans for a reason, and their terms and rates are a lot less forgiving than a mortgage. Hard money loans have higher interest rates (usually around 8–15%), lower LTV ratios, and shorter repayment periods than traditional mortgage loans. They require greater down payments on behalf of the borrower and can be very difficult to pay off if the real estate transaction does. network out.
It’s also essential to only work with hard money lenders you can trust, and especially new investors have to be careful to avoid loan sharks.
At Hard Money Lenders IO, we have found the best hard money lenders in South Bend so you can purchase and invest in real estate in the market.