Financing Unconventional Commercial Properties with Private Money Loans
Kyl Roelofs • May 19, 2023
Not every
commercial real estate deal fits inside the narrow guidelines of traditional bank or small business loan financing. If you’re pursuing a unique project— such as a mixed-use development, warehouse conversion, behavioral health facility, or a data center— you may find that banks are reluctant or unwilling to finance it. These types of assets often fall outside the comfort zone of
traditional lenders, regardless of their potential value.
Private money loans offer a flexible solution for funding these business venture properties. Unlike banks, private lenders focus less on the qualifications of the borrow, profit and loss statements for historic income, and more on asset value and future growth. For investors,
developers, and business owners looking to move quickly and creatively, private money lending is often the best financing tool available.
Why Some Banks Decline Unconventional Commercial Business Loan Applications
Banks and institutional lenders are designed to minimize risk. They typically look for stable, income-producing properties with predictable returns and clean underwriting. Projects that require rezoning, repositioning, or substantial renovations are usually considered too risky or
speculative.
Some of the most common reasons banks decline these projects include:
- Lack of stabilized income or historical cash flow
- Zoning or permit challenges
- Unique business use or operational complexity
- Property types with limited comparable sales
- Short-term investment strategies or value-add plays
This creates a significant roadblock for developers and investors who specialize in creative real estate strategies.
The Private Lending Advantage
Private money lenders, also known as
hard money lenders, offer short-term commercial loans based on the value of the asset and the strength of the borrower’s business plan.
These lenders are not limited by the same regulatory constraints as traditional banks, which allows them to make faster decisions and structure loans around unique opportunities.
Here are a few reasons private money loans are well-suited for unconventional commercial properties:
Asset-Based Approval
Private lenders primarily evaluate the property’s current or projected value. If your project has a clear path to profitability, they are more likely to approve funding— even if the property is currently underperforming or vacant.
Faster Closing Timelines
Traditional loans
can take 60 to 90 days or longer to close. Private lenders can often fund within one to three weeks. This speed is crucial when competing for properties, working under tight timelines, or securing off-market deals.
Flexible Loan Structures
Private lenders offer more creative loan terms, such as interest-only payments, balloon payments, or short-term bridge financing. This flexibility allows you to structure the loan around the phases of your project.
Common Unconventional Projects Funded by Private Lenders
1. Mixed-Use Developments
These projects combine multiple uses, such as residential and retail or office space in one property. The complexity of revenue streams and zoning requirements often make banks hesitant. Private lenders are more comfortable with these hybrid models and can finance during acquisition or redevelopment.
2. Warehouse ConversionsTransforming older industrial buildings into creative office spaces, studios, or retail concepts can be highly profitable—but risky in the eyes of traditional lenders. Private financing allows investors to reposition the property and later refinance once it’s stabilized.3. Addiction Recovery and Behavioral Health FacilitiesFacilities offering addiction recovery or behavioral healthcare services face additional regulatory, licensing, and operational complexities. These factors, along with unique revenue models, often cause banks to decline financing. Private lenders experienced in healthcare and specialty use cases can step in to support the acquisition or development of these essential facilities.4. Data Centers and Digital Tech InfrastructureData centers require significant upfront capital investment for infrastructure, cooling systems, and redundancy. Traditional lenders often lack the industry knowledge to evaluate these deals. Digital infrastructure for data and technology centers is vital to advancing the future with the advent of artificial intelligence and AI backed startups. Private lenders familiar with tech-sector real estate may offer bridge or construction loans to fund expansion, acquisition, or buildout phases.5. Redevelopment and Value-Add ProjectsInvestors seeking to add value through renovations, tenant repositioning, or property upgrades often face resistance from banks, especially if the asset is not generating strong income at the time of purchase. Private lenders are comfortable providing capital during these transitional phases, with the expectation that borrowers will refinance once the property is stabilized.
Finding The Right Lender for Your Hard Money Business Loan
If you are pursuing a commercial project that doesn’t fit within the traditional lending framework, a
private money loan
can be the best alternative. These loans offer speed, flexibility, and a practical path forward for investors and developers who specialize in
unconventional or value-driven properties.
When looking for a lender for financing your next project, some of the important aspects to consider (aside from interest rate, points, pricing) is the speed of the funding, familiarity with non-conforming commercial projects, and the ease of the loan application process. Time is money, and the less time and stress the financing part of the process consumes from your business, the greater ability you have to focus on steering what matters most.
That’s why at Fast Loans, we pride ourselves in being arguably the fastest hard money lender in the industry. Our lenders have extensive experience with unconventional types of commercial businesses, and they are able to underwrite and fund as soon as the next day.
We have worked diligently to foster our relationships with our lenders to enable them to trust us (and our clients) to succeed with higher risk business ventures.
Whether you are repositioning a mixed-use space, expanding a behavioral health facility, or transforming industrial space into a data center, OUR private lenders can provide the capital you need to execute your vision. Without diluting your equity and without taking on venture capital to expand your business. When used strategically,
private money financing
can help you move quickly, take advantage of unique opportunities, and maximize your future returns by leaving you with as much equity as possible in the long run. If this sounds like something your business would be interested in learning more about, call us today or fill out our online form to hear from a member of our team.
You might also like
Flipping residential assisted living properties has emerged as a lucrative niche in real estate investing, offering both financial rewards and the opportunity to provide essential services to the aging population. Brett Chotkevys says flipping houses is “fading” and that assisted living is the new gold mine. In his podcast he discusses how he went from flipping hundreds of houses to instead flipping luxury assisted living facilities. “If you’re still grinding it out with house flips, wholesaling, or chasing multifamily deals in 2025… it might be time to pivot. Brett reveals how these high-end, 10,000+ sq ft residential care homes are generating predictable income, high margins, and long-term equity, while also creating a real impact in the community. Forget six beds and headaches, this model is built for scale, sustainability, and legacy.” To learn more about Brett Chotkevys visit here: https://www.youtube.com/@Brettchotkevys1 Other case studies involve investors who have transformed single-family homes into assisted living facilities by converting a standard home into a facility that accommodates 6-10 residents requiring assisted living services. Investors have reported substantial monthly cash flows. For instance, a property that might typically rent for $1,200 per month as a single-family home could generate significantly higher income such as $6000-$10,000 when operated as an assisted living facility, due to the higher per-room rental rates and additional services provided. These case studies illustrate the potential profitability of investing in assisted living properties. Whether you’re planning to convert your rental property into a memory care mansion, looking to make a purpose-driven impact on the community, or planning for early retirement, senior care and assisted living home opportunities are a high yield vehicle to achieving your dream. The time to pivot into high yield, lucrative, assisted living homes is now. Don’t wait until 2026 when the opportunity to capitalize on this wave has become saturated. Learn how to add assisted living homes into your portfolio now. Our experienced team at Fast Loans can help by offering the hard money loan or private loan solution you need to convert single family or even multifamily into an assisted living investment property. Call us today to book a free consultation.
Many people wonder if it’s too late to get into the assisted living business . The quick answer: it’s not too late, not even close. In fact, 2025 may be one of the best times to enter this profitable space. Demand for senior care is climbing steadily, and there are still plenty of opportunities to build a successful, profitable business, even on a small scale. Let’s begin with some numbers to get a clear picture of what’s possible. Gross income is the total revenue your facility brings in before subtracting expenses. A small ten-bed assisted living facility , even one that accepts Medicaid residents, can generate about $40,000 in gross income per month. That might come as a surprise, especially since Medicaid is often viewed as a lower-paying option. But the numbers tell a different story. Take this example. A Medicaid resident might bring in $100 per day in reimbursement. Over the course of a month, that’s $3,000. Add in around $800 per month in Social Security benefits and potentially an additional $200 in resident-paid share of costs, and you’re looking at approximately $4,000 per resident per month. Multiply that by 10 residents, and you arrive at $40,000 in monthly gross income. That’s a solid foundation, and it’s not at all unrealistic. Of course, the key to profitability is understanding your expenses. Net income is what remains after covering all operating costs. In the assisted living business, your major expenses typically include staffing, food, insurance, and debt servicing. Staffing is usually the largest single cost. After all, hiring and retaining qualified, compassionate caregivers is critical to running a facility that families trust. Food is another ongoing expense, and it can be estimated using the per resident per day (PRPD) method. For instance, with 10 residents and a daily food budget of $8 per resident, you can expect to spend about $80 per day, which adds up to around $3,200 per month. Insurance is another necessity. You’ll need liability insurance and other forms of coverage to protect your business and meet state requirements. Then there’s debt servicing— loan payments on any property you buy or improvements you make. These costs can vary widely depending on your location, lending terms, and facility type. So, what does that mean for your bottom line? In a smaller facility that’s well-managed, profit margins of 75 to 80 percent are not unheard of. If your gross income is $40,000 per month and your expenses are controlled, you could be looking at a net income of $10,000 or more monthly. That’s a strong return for a small business and one that provides a critical service to the community. The reality is that the market still has room for newcomers. The U.S. population is aging rapidly, and the need for quality care isn’t slowing down. In fact, small residential assisted living homes are becoming more popular with families who want a more personalized and home-like environment for their loved ones. There’s also growing recognition that Medicaid-focused models can work well when designed thoughtfully and operated efficiently. If the idea of running an assisted living facility appeals to you but you’re unsure where to start, Assisted Living Investing is here to help. From navigating licensing requirements to understanding the financials, we guide aspiring owners through the entire process. A great place to begin is with our free underwriting calculator, which helps you estimate income, expenses, and profit potential based on real-world scenarios. So no, it’s not too late to get started. If anything, now may be the ideal time to enter the industry. With high demand, scalable opportunities, and the right support, assisted living can be a personally rewarding and financially sound business in 2025 and beyond. Ready to start exploring private financing options to acquire your next assisted living facility with as little headache and paperwork as possible? Then call our team at Fast Loans today to get started. We offer free consultations to discuss your assisted living investing needs.
Forget crypto. Forget vacation rentals. The real money is where the baby boomers now turned senior residents are. Assisted living and senior care facilities is one of the most profitable and yet quietly booming business investment opportunities on the market today. Some economists now estimate that there will be an additional 27 million seniors needing assisted living by 2050. So if you’re a savvy real estate investor, private equity partner, or high-net-worth individual looking for a gold rush opportunity that pays in serious cash flow (and also make a positive impact), you might want to lean into assisted living facilities. Why Senior Housing is the New Luxury Real Estate By 2030, every Baby Boomer will be over 65. That’s more than 70 million people aging into a stage of life where they need more support — and they're willing (or their kids are willing) to pay a premium for it. Today’s assisted living facilities are more like boutique hotels with concierge amenities and executive nurses. Think wine nights, yoga, and chef-prepared meals — all with medical staff just a call button away. It’s a high demand, high margins, and recession-resistant industry. Here's How You Can Get In Early on the Gold Rush Investors are financing their way into existing cash-flow senior living facilities. But before you start browsing senior care properties like they’re luxury Airbnbs, let’s talk about the money side because no investment starts without smart capital. Here are the top assisted living financing options savvy investors are using: 1. Assisted Living SBA Loans: Government-Backed, Investor-Approved If you're willing to invest in the long haul, SBA 7(a) and 504 loans are a solid entry point. They offer low down payments, long repayment terms, and competitive interest rates. Perks: 10–25 year terms, low fixed rates Pro tip: Lenders love experience. Partner with an operator if you’re a pure investor. 2. Assisted Living Hard Money Loans: When You Need Speed, Not Red Tape Hard money private loans are for investors who move fast and think faster. Expect higher rates but way less paperwork — perfect if you're scooping up distressed properties to renovate into senior care goldmines. Or flipping an existing senior living property into a luxury assisted living facility, which you can later cash out or exit for higher multiple due to the value-add from the new upscale amenities. Perks: Fast funding, flexible underwriting Pro tip: Work with an experienced private money lending team, like our experts Fast Loans , to get fast funding with minimal paperwork and competitive rates. 3. Assisted Living Business Lines of Credit These are great if you already own a cash-flow positive facility and want to expand or upgrade, and you can provide the income and profit and loss documentation to finance with a traditional bank. It’s not a fast or flexible and private loans, but they often beat traditional business loans. Perks: Predictable payments, potential tax advantages Why Capitalize on This Once in a Lifetime Gold Rush Assisted living facilities can average 15% annual returns, with several exceeding 30% in luxury or high-demand markets. Plus, you’re building equity in the real estate that will likely appreciate in the long term. And you can defer taxes and leverage other tax advantages by utilizing a 1031 exchanges when selling the assisted living facilities. The baby boomer senior living gold rush will only happen once. We likely won’t see another wave of seniors entering the assisted living market again. Capitalize on this once in a lifetime opportunity. People will need increasingly more care as the wave of baby boomers turned seniors on the horizon. And investors who move early on a gold rush, land the biggest pots of gold. So book a free consultation with one of our experts, or request to see a list of active senior living facilities for sale that you can quickly acquire with an asset-based private loan. We’re here to help you capitalize on investments fast.