Tourism is a big part of the economy here in Utah. As such, we think it is important to consider investments in the tourism sector when they make themselves available. Such is the case with a loan we recently made for a multi-unit rental complex.
The complex makes its money on tourism. With eight units, it provides nightly rentals to people visiting the area or just passing through. Its business model may not have been attractive at the start of the COVID crisis, but with tourism across Utah now rebounding, the property has tremendous value.
Value is what we look for in the projects we invest in. For this particular loan, the property itself was the collateral. Between the actual value and its rental potential, there was enough there to justify interest on our part. We did our due diligence, made the loan, and helped the client secure this property.
Strong Tourist Location
The value of any commercial property is determined by a wide range of factors. In business, they say that location is everything. This eight-unit rental property is in a prime location for tourists, giving its owners access to a very reliable market of nightly stays. That is exactly what we like to see in commercial properties: a location that invites business.
As we normally do, we valued the property in order to determine how much we could offer the lender. When all was said and done, we felt the property was worth lending on. We are confident the deal will ultimately prove beneficial to everyone involved.
Short Term with a Good Exit
Not only did the value of the property meet our expectations, but we were also able to work with the client to structure the loan with a short term and a solid exit. The term on this loan is less than one year. We feel this is good for the client in the sense that capital will not be tied up paying off a loan for years down the road. It is good for us and that we can get our money out of the project and move on to others in short order.
If you are new to hard money, this particular loan is illustrative of the fact that hard money loans are short term loans. They are not intended to drag on for years. In exchange for the short term, clients get access to fast cash based almost exclusively on the value of the collateral at hand.
Contact Us to Learn More
Here at Actium Partners, we are always eager to learn more about projects we can invest in. We urge you to contact us to learn more about how hard money lending could benefit you and your organization. Just note that there are certain types of projects we do and do not invest in. Most of our loans are made on commercial investment properties, though we do loan to businesses from time to time.
The benefits of hard money include speed, less paperwork, and a more efficient approval process that does not involve looking into every detail of your finances. We are interested mainly in whether we can make a loan work based on your collateral. Bring enough to the table and you are in a good position.
We are pleased to have been able to help our client acquire his multi-unit rental property late last year. The tourism industry is coming back here in Utah, and our client is expecting big things from this property. We are pleased that we were able to help make the client’s investment goals a reality.
