Renovation and Rehabilitation Funding
Everyone in the commercial real estate market is looking for the right opportunity. Many developers and property managers are finding it in renovation and rehabilitation projects. When you find a sound building that is aging or in disrepair, acquisition costs can be far below the cost of new construction. By leveraging renovation and rehab loans, you can build equity in the property rapidly with minimal out of pocket costs. This financing strategy works whether you own the building already, are buying to hold, or are acquiring it for a fix and flip.
Improve Your Property
Rehabilitation loans help you increase the value of your property today. In addition, you can also create longer term profits through energy efficiency and ongoing appreciation (as well-maintained properties see greater appreciation over time).
Buy to Lease
In many aging districts, cities have designated development areas where you can seek forgivable loans, tax incentives or other benefits for revitalizing property. Contribute to your community and increase your cash flow at the same time.
Fix and Flip
Funding is also available for construction teams and developers who are in the business of rehabbing aging properties and selling them at a profit. Why tie up your cash when you can get funding based on the after-repair value of your property?
How do rehab loans work?
A typical rehab loan is typically financed based on the future, after-repair value of your property, but it gives you immediate funds to complete these repairs. Whether you are replacing aging electric, plumbing and HVAC, or are giving your lobby and public areas a refresh with modern amenities, rehabilitation funds allow you to do a lot with what you already have. Increase leasing revenue, foot traffic and property value in one with a contemporary look on your classic building.
years of combined industry experience.
years of combined industry experience.
Benefits of rehabilitation funding
In many cities there are incentives for development in specific parts of town. Maybe a district has come into disrepair, or it is known that properties may be endangered by aging mechanical systems. In these instances, you may receive incentives to upgrade.
Adding sustainable and energy efficient features such as a heat reflecting commercial roof, solar panels, or rainwater recycling system to save on irrigation can save you and your tenants money on utilities now and improve your profit margin in the long run.
Rehabilitation loans can increase your cash flow by increasing the percent of property leased, by raising the cost per square foot of leasable space, and by attracting customers with modern amenities and features.