One of the most common beliefs about hard money loans is that these are short terms loans for businessmen that are trying to get some kind of construction or property investment off the ground. While it is true that the majority of hard money loans are shorter in duration—five years or less is common—there ARE exceptions to the rule.
The majority of traditional banking loans like mortgages can run 20, 25, even 50 years in duration. But for someone with an ambitious, long term vision, there are hard money loans that can last up to 30 years.
The Rehab To Rental Program
Sometimes, the best investment is one that takes years to bear fruit. A structure with the potential to be saved, rehabilitated and brought back onto the market as a profit generating rental building is a perfect example of this. Many cities have buildings that are old, unmaintained, and unlikely to be compliant with modern safety and building code standards. But these buildings still have “good bones.” And in an era where homeownership is increasingly becoming a less popular alternative due to rising costs, renting just makes more sense.
Of course, taking a building and saving it from itself can be an arduous task, not made any easier by the state of the building when you find it. It can take a lot of research and work to restore a building. However, if you choose wisely, especially if you know the building is located in a section of a city that is experiencing a second chance to grow, such as old industrial areas being repurposed for residential and retail needs, that is a great opportunity.
A 30 year rehab to rental program is the perfect answer to a long term project with great promise. Unlike traditional banking loans, a hard money loan will grant approval much faster, and is more concerned with the potential of the project than the credit rating or financial record of the people involved.
This is also a great opportunity for foreign investors, as hard money rehab to rental programs aren’t as stringent with granting approval to foreign nationals that wish to improve buildings. If you see an area with a promising future, and know a good investment when you see it, but need to act quickly, here’s your chance. By committing to a rehab to rental program, you can get the money you need to create a new renting opportunities and save an old building at the same time.