I see too many niche STR investors looking to build abnormal property types in rural markets and they have an impossible time refinancing out of the deal. 

This type of money is generally used as a bridge to go from acquisition to stabilization where conventional options become available. 

For older demographics, consider the availability of medical centers, entertainment, and restaurants.Buildings/Permits: Assess the city's growth compared to previous years.Determine if the city can accommodate future supply.Government Regulations: Examine the city's efforts and the type of businesses they are targeting.

@Ben FrenchYou can find more expensive notes in major cities but two things typically occur with these types of assets.First is you will pay more the note and second is the borrower is significantly more sophisticated and will also employ a legal team and fight you tooth and nail to keep the property if it does have value.

You are dealing with a specific lender overlay and not all banks/lender have those types of road blocks.

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Think it is too small to grab it and may turn into some type of functional obsolescence if you make it a bedroom then someone (or other people) will have to make it into something else.

Lots to factor in with these type of loans, but they often happen when the borrower needs to recoup the down payment with a hard money loan.

The challenge lies in managing renovations and the surprise costs that can come with them over time.New construction, on the other hand, tends to be simpler with less immediate maintenance and potentially better loan rates, but you may have to accept a slightly lower cash flow due to higher purchase prices.In the Atlanta area, there are several hotspots for new builds with great long-term investment potential, as well as older homes you will need to pinpoint which type to best advise here.Hope that helps streamline your decision-making!

Hi @Michael Ablan, I would check the rental laws around these types of rentals.