A property that is owned and occupied by an owner would be a good investment for a real estate investor. It is basically a property that is already occupied and hard money lenders prefer to avoid these types of deals. This is because there are different rules and regulations that apply to owner-occupied properties than those for vacant ones.
Because of the complexity involved, residential hard money loaners in California won't fund such deals because there will be lots of paperwork. If you're an investor looking to remodel an owner-occupied home, it's a good idea to weigh all the options again. It can be very difficult to obtain funding for this deal.
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Avoiding these properties is important because most hard money lenders aren't that large. They are unable to access financial help and must do all the work themselves. They prefer short-term lending because they can close the deal in six months without too much hassle.
Owner-occupied properties are more expensive to maintain and take longer to remodel. They also have lower profitability. Sometimes the remodeling of these properties is so delayed that it eventually goes into foreclosure. Single-family homes are preferred by residential hard money lenders, because they are easy to remodel and have a high profit margin.
They can also remodel duplexes, threeplexes and fourplexes, but prefer single-family homes. A hard money loan helps someone who wants to purchase a property or rehab it, but isn't able to borrow traditional loans. These loans are better for private money borrowers, but they are also beneficial for lenders and borrowers, provided that they are only used for a limited time.