Hard money lenders offer two primary advantages in Washington DC. First, the borrower can receive more than the house is currently worth; and second, the home serves as security for the transaction.
When you take out a hard money loan, the lender offers a percentage of the home’s after repaired value, or ARV. This number reflects the forecasted value of the home after the borrower repairs, renovates, or remodels it.
Second, speed is a critical factor in choosing hard money. Banks move slowly, and the market moves quickly in Washington DC. Get your funds before your competitors, and you have a better chance of scoring that great property!
Hot Up and Coming Neighborhoods in Washington DC
Getting a great deal on a home in a thriving neighborhood depends a lot on timing. The Washington DC area has several flourishing communities that might be attractive to investors. However, some are more expensive right now than others.
Presently, property in Woodbridge seems to be the hottest investment in DC. Once a quiet neighborhood nestled northeast of the capitol, Woodbridge has recently experienced significant growth. As investors and young families learn about the affordable homes and ease of access to downtown, they are buying the available properties quickly. Long-time property owners who relished their peaceful neighborhood are moving out as it becomes clear Woodbridge is changing. This only gives more opportunities for investors.
Architecture in this part of DC consists of mostly bungalows, although larger homes are available. Right now, property values are still relatively low, with the median home price less than $400,000. This area is mainly residential, with tree-lined streets similar to suburbs in various other communities around the U.S. However, there is plenty of opportunity to shop in the nearby community of Brookland.
Brookland borders Woodbridge but property prices are much higher this year. However, since they are expected to rise further, investors may still be able to make a profit by purchasing a home in this community now. This area offer a lot of the same charm as Woodbridge with the added benefit of a wealth of retail establishments. Rhode Island Avenue offers mainstream shopping opportunities with something for everyone. The median home price in this neighborhood is $435,000, with a brand new 3-bedroom rowhouse selling for as much as $750,000.
Another option is the city of Hyattsville, Maryland. This area is currently experiencing growth and expects its own Whole Foods in the near future with the promise of additional retail in Riverdale Park. Hyattsville offers the same bungalow-style housing as other DC area communities but is much more diverse. Investors who purchase property in this area might benefit from renting to University of Maryland students or faculty. The median home price is up over 23 percent since last year but the prices are still very reasonable with the median home price only $260,000.
Another area that doesn’t get enough attention is Fort Washington, Maryland. Located south of DC, this area is drawing investors with its historic charm and affordable real estate. Until 1960, this was a rural area. Nearly all of the homes were built after this time, when suburban growth necessitated single-family housing. It’s been on a track of steady growth ever since. Fort Washington has plenty of waterfront properties and is in close proximity to national parks. Because it borders the Potomac River, there are plenty of opportunities for water sports like kayaking and boating right in the community. The median home price in Fort Washington is less than $300,000.
The Washington DC area offers some great opportunities for investors. Many of the older neighborhoods are experiencing gentrification so values are steadily increasing. Business growth is also leading some neighborhoods to be more appealing to buyers who prefer to do all of their shopping in their own community. While areas like Brookland have been growing in popularity for a few years, neighborhoods such as Fort Washington have yet to explode. Buyers who want to get in the market before everyone else should consider Fort Washington or Hyattsville.