Youngstown is a city with just over 60,000 people in Ohio, equidistant from Pittsburgh and Cleveland. Youngstown has several nicknames, including “The City of You” and “Steel Town.” While Youngstown has historically been known as a hub of the steel industry, the decline of the industry has led Youngstown to become home to theaters, a culture scene, entertainment and culture.
According to Niche, Youngstown is now a very liberal place with many bars, restaurants, and more. It has a suburban feel and the majority of people in Youngstown own their homes. Youngstown is a very cheap place to live with a very low cost of living. It has a median home value of $44,800 and a median rent of $662. Youngstown is one of the most diverse places to live in Ohio, which says a lot since Ohio itself is an extremely affordable state.
Right now, Youngstown is a seller’s market. Demand for housing is outpacing supply, which means houses are selling fast and for higher than listing price. It’s important to get an offer in quickly to compete for a property you may wish to invest in.
Hard money loans might be your answer for real estate investing in Youngstown. Hard money loans are also known as bridge loans or last resort loans, but their biggest advantage is they can be approved very quickly. Hard money loans can be approved within a couple of days, which is incredibly advantageous for a real estate investor looking to bid on a competitive property. This is beneficial especially when you compare a hard money loan to a traditional mortgage loan, which can take at least a month to be approved given the significant documentation required.
The reason a hard money loan can be approved so quickly is that they’re based on the property as collateral, particularly the after-repair value of a property. This is not to say the financial position of the borrower does not matter, as hard money loans still require a minimum credit score of 600 to 620. However, if a borrower defaults on a hard money loan, the lender takes on the property and hopes it pays off the loan. In some cases, the lender can make an even greater profit if a borrower defaults on the property. In contrast, when a borrower defaults on a mortgage, there is an expensive and lengthy costly foreclosure proceeding.
As such, hard money loans are more risky for both the borrower and the lender. They have higher interest rates than mortgage loans, they have much shorter repayment periods, and they have shorter LTV ratios. In particular, hard money loans have interest rates of about 8–15%, repayment periods around one year, and LTV ratios around 70–80%. This means if a real estate investment does not pan out, the hard money loan can be difficult to pay off.
It’s important to be careful with hard money loans, since not every lender is trustworthy. Some might tack on extra fees like underwriting fees and closing costs. New investors and foreign nationals may encounter barriers getting loans since most hard money lenders require a successful investing history in the U.S.
Hard Money Lenders IO has compiled a list of the best hard money lenders in Youngstown, so you can find the best lender to give you the best rates possible on your real estate investing journey.