Hard Money + No Rehab Needed

[Jemir Martinez]

Greetings All,

There is a multi-family (duplex) I’m looking at that’s currently rented out on both sides with Section 8. The tenants have been there for over 10 years according to the listing. 
Couple questions:

- Why would someone sell a property that’s getting guaranteed money from “good” tenants? Is this a bad sign?

- To get the funds to buy it can I use hard money even though the property doesn’t need any rehab? If so, is this the best way to purchase it knowing that I don’t have the 20-30% down for conventional loan? 

[Carl Davis]

Quote from @Jemir Martinez:

Can you explain that a little further? Are you saying that the loan can only last for 12 months and not go any further? If so, how would one pay it off in 12 months? Don’t see how I could pay off $350k in 12 months. 

 Like Bob said above. Hard Money loans are only given on usually up to a 18 month payback period max, then the loan has a balloon payment of the full loan amount at the end. If you are using the hard money to only acquire and there is no rehab or anything to INCREASE the value of the property then it almost defeats the whole purpose of this loan product and I would not recommend it whatsoever.