Shelby Reed, CEO of Minnow Loan, shares some insights about real estate investing and hard money lending in Missouri – current trends, challenges for investors, lending landscape, etc. Watch the video or read the interview transcript below.
Summary of Real Estate Investment and Hard Money Lending in Missouri
Market Dynamics Driving Real Estate Investment Activity
Shelby Reed highlights that one of the most significant factors influencing real estate investment in Missouri is the lack of available inventory. While Missouri traditionally has a stable housing market with less volatility compared to states like Florida, Arizona, or California, the current inventory shortage is driving up prices across buying, selling, and rental markets.
Key Investment Hotspots in Missouri
Investment activity is observed statewide, though major metropolitan areas such as St. Louis and Kansas City continue to experience the highest volume of transactions. However, real estate investment activity is not limited to these cities, with transactions occurring across various locations throughout Missouri.
Hard Money Lending Landscape in Missouri
Missouri real estate investors have two primary financing options:
- Traditional community banks
- Hard money lenders
While there are several nationwide hard money lenders operating in Missouri, Minnow Loan differentiates itself as a local lender based in Columbia, Missouri, with deep market knowledge and direct borrower relationships.
Minnow Loan’s Competitive Advantage
Shelby Reed outlines how Minnow Loan stands apart from competitors:
- Uses its own capital, allowing for internal underwriting and greater flexibility in loan structuring.
- Direct borrower communication enables a better understanding of deals, risks, and lending needs.
- The ability to provide customized lending solutions tailored to investors’ specific deal structures.
Types of Hard Money Loans Funded
Minnow Loan funds a variety of real estate loans, with a focus on:
- Fix-and-flip loans
- Bridge loans
- Fix-and-hold loans
A growing trend among investors is the shift toward fix-and-hold strategies, where properties are retained as long-term rentals rather than flipped. Despite increasing property prices, investors are opting to hold properties and generate rental income rather than selling them immediately. To accommodate this shift, Minnow Loan has adapted its offerings by converting bridge and fix-and-flip loans into long-term DSCR (Debt Service Coverage Ratio) products, giving investors more flexibility in expanding their portfolios.
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