Exploring the real estate market in Columbus, Ohio, can be challenging, especially when traditional financing options don’t align with your needs. Whether you’re eyeing a quick property flip in German Village or looking to invest in rental properties near Ohio State University, knowing all of your financing options is essential. One such option that has gained popularity among local investors is the hard money loan. Hard money loans offer a flexible and fast alternative to conventional loans, making them ideal for real estate investors in Columbus. This guide will explore what hard money lenders are, how these loans work in Columbus, and how they can be a valuable tool for your investment strategy. A hard money lender is a private individual or company that provides short-term loans secured by real estate. These lenders typically work with real estate investors such as house flippers and those looking to invest in rental properties. Unlike traditional lenders, hard money lenders focus on the value of the property rather than the borrower’s creditworthiness. The loan amount is usually based on the after-repair value (ARV) of the property, which is the estimated value of the property after renovations. Interest rates for hard money loans are generally higher than traditional loans, ranging from 8% to 15%. Borrowers also need to be aware of origination fees, closing costs, and other expenses. If a borrower fails to repay the loan, the lender can foreclose on the property to recover the investment. Additional costs can include origination fees, closing costs, and points, which are a percentage of the loan amount paid upfront. Hard money loans provide a quick and flexible financing option for real estate investors in Columbus. Here’s how these loans typically work:What is a hard money lender?
How does a hard money loan work?
