Hard money lenders in Iowa are an outstanding financing source for real estate investment buyers.
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Iowa is a Midwestern state with a lot to offer. It is bordered by the Mississippi River, Missouri River, and the Big Sioux River. It is a diverse state noted for its strong economy in areas such as information technology, financial services, manufacturing, and biotechnology. It’s also an area that is seeing a growing green energy industry. Home to about 3.1 million people, Iowa isn’t the largest state in any way, but it is a place where people enjoy a good quality of life. Easy to get from place to place with a number of larger cities, including Cedar Rapids, Sioux City and Des Moines, IA is the type of area people call home for generations. Many who live here remain here for generations.
Iowa is a moderately priced state overall, with a mid-range cost of living compared to other areas of the country. That shows in the real estate market. The median sales price of a home in Iowa in August of 2022 was $195,000. That is competitively low compared to many other areas in the country. The highest home prices here are in the suburbs around the largest cities, including Des Moines, but there are also other neighborhoods that are far more affordable.
When it comes to investment property purchases, Iowa has an opportunity for some people in some regions. In the state, about 73.3% of people own the homes they live in, and 26.7% rent those properties, according to data from the U.S. Census Bureau. When it comes to rental property, the area has a 3.8% vacancy rate, which is substantially low. That could mean there is the potential for investment properties here. Those borrowers who hope to buy and turn properties into rentals could find some benefit in doing so within this community.
A hard money loan is a type of asset-backed loan. These real estate loans are often offered to borrowers who meet lender requirements and may be investing in properties that are typically harder to finance with conventional or government-backed or commercial loans. Lenders are able to offer these loans for several reasons, primarily because the value of the property backs up the loan itself. In situations where the borrower stops making payments or otherwise does not follow the expectations of the contract, the lender can force the foreclosure of the home, recouping the investment they have made into the property.
Hard money lenders in Iowa also charge a higher interest rate than what could be expected in a traditional loan. This higher interest rate helps to compensate the lenders for the heightened risk of these loans. In addition to this, these loans tend to have a short loan term. Most of these loans are designed to last between 1 and 5 years. The short term works for borrowers who are working to buy property, repair it, and then sell it or refinance it into a more affordable loan down the road.
Hard money loans in Iowa offer another benefit in that the lender may be able to loan to the borrower at the after repair value of the property. For example, if a property needs a significant amount of work, the lender may be able to lend enough to the borrower to enable them to make those repairs, based on the expected value of the home, once those repairs are complete. This could make it easier for some of today’s investment buyers to reduce their risk of using their personal savings to cover the cost of big-scale real estate projects.
If you’re in the market for a real estate investment project in Iowa, consider these hard money lenders that are available for projects in the state.
BridgeWell Capital got started in 2008 and, according to their website, has funded over $500 million in real estate investment deals. They lend throughout the midwest and eastern part of the country and offer the typical suite of private money financing.
We contacted BridgeWell Capital to learn more about their private lending business and here are some of the highlights:
When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.
Lima One Capital is based in Greenville, South Carolina and founded by former Marines. They lend throughout the United States and offer typical private money lending products like Fix and Flip, bridge loans, construction loans, rental loans and multi-family loans.
We contacted Lima One Capital to learn more about their private lending business and here are some of the highlights:
When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.
Fund That Flip is a hard money lender based in New York that focuses on short term bridge loans for real estate investors looking to flip properties. Founded by Matt Rodak in 2014, Fund That Flip lends in most states.
We contacted Fund That Flip to learn more about their bridge loan program and here is what we found:
When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.
EquityMax is based out of Florida and most of its business in the state but is able to lend throughout the United States. Founded by Brad Emmer in 1990, EquityMax has decades of experience as a hard money lender.
We reached out to EquityMax to learn more about their hard money loans and these are the key highlights that you need to know:
When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.
HouseMax Funding is based out of Austin, Texas but has a national footprint when it comes to real estate industry lending. Started by Jeff Fetcher and Alex Morris, HouseMax provides asset-based loan financing to investors for real estate transactions.
We reached out to HouseMax to learn more about their hard money lending program and here is what we found:
When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.
Stratton Equities is a nationwide direct hard money lender for real estate investors. Founded by Michael Mikhail in 2017, Stratton Equities has over five years of experience in the private lending market.
We reached out to Stratton Equities to get more information about their hard money lending program and here are some highlights:
When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.
LendSimpli is a hard money lender based in Tampa, Florida. They can lend nationally in most states but may not be able to lend if the property is in a rural area. Founded by Brenden Crampton and Matthew Davies in 2018, they have nearly four years of experience in the private lending real estate investing market.
We reached out to LendSimpli to get more details about their bridge loan product and this is what we found:
When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.
There are numerous differences between home loans from traditional banks and credit unions and hard money loans in Iowa. First, hard money lenders in Iowa are not traditional banks which means they do not have to follow the same regulatory requirements set by the government when loaning. Sometimes they are individual lenders, or they could be a group of lenders. That is why they may be able to lend to borrowers on properties that would be difficult to finance any other way.
Interest rates differ as well. There is more risk to the lender with these loans. As a result, Iowa hard money loans are going to have an interest rate that is a bit higher than what could be expected from a traditional conventional loan or the current key lending rate. As a result of this, borrowers can expect to pay more during their loan term. Another factor is that these loans are shorter in term, often no longer than 5 years. By comparison, most traditional loans are 15 to 30 year loans. That’s also one of the reasons the interest rate on these loans is higher, to compensate for the shorter term.
There are many other differences as well. Down payment requirements, credit scores, and borrower experience with investment properties may differ from one lender to the next. For those considering a fix and flip type of investment, there are still requirements for ensuring the home is valuable and in an area where this type of opportunity could prove viable. That’s the same for rental property as well. With a faster closing time of within a matter of weeks compared to months with traditional lenders. There is no doubt that Iowa hard money lenders offer a financial product that is essential for borrowers.
If you want to find the best hard money lenders in other states, click on your state below.
Joshua Holt is a licensed mortgage loan originator (NMLS #2306824) and founder of Biglaw Investor. His mortgage expertise lies in the areas of professional mortgage loans, particularly for lawyers, doctors and other high-income professionals. Prior to Biglaw Investor, Josh practiced private equity mergers & acquisition law for one of the largest law firms in the country.
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