If you miss loan payments, or your credit goes bad the bank or loan issuer could call your loan, provided of course the loan is callable in the first place.

We work with investors but will not do properties with a hard money loan on them.

@Sarah Santa CruzIf you have funds and are liquid to cover repairs etc then I would pay it down as it gives you flexibility and exit strategiesI would not pay down the 3-4% loans as you can invest it and do better but at 7.375% investing to get that return (net) would be historical average so I would say pay it down

@Dan Guenther to add to your deal, there are loan that lend specifically on STR income that this property location can qualify for.

All-in costs, including design, survey, permitting, construction loan interest, land, construction will be $360,000.

People still want to live in these areas but it may not be easy for them to qualify for a mortgage or the banks may not want the particular property on their books because of peeling paint, loan amount, etc.

Note this is my first time dealing with this loan broker and lender. 

I used a VA loan and put 0% down.

And somehow the loan went into foreclosure..

Open to loans but only if we net 10k a month after mortgage payments