This short-term financing option, usually two years or less, enables access to a property’s equity to fund capital improvements or repairs and eliminates the need to raise funds from personal sources or less flexible, higher-cost alternatives. The goal is usually to increase rents and/or reduce operating expenses to increase the value of the property and make it eligible for standard financing.
The borrower’s expertise, net worth and liquidity, as well as the location and quality of the property are key considerations for this type of financing.