Is Do Hard Money legit?

13 Replies

This would be my absolute first flip and I've already identified a property that is selling for $50k, and the literal next door over was just bought for $65k and sold for $125k 3 months later.

My Question is: I'm preapproved with Do Hard Money who is offering to give me for my first flip 70% of the ARV. They're offering 5.5 Points on the project and 1.25% interest per month on the money. I have to only put down a $3,000 Down Payment which, after the entire project is done they'll refund me $2,350. Otherwise, the only other money I'll have to put down is earnest money.

They say that they'll fund 100% of the Purchase and Rehab costs if it's under 70% of ARV. Is this a good deal? Is this normal?

From what I know, they are legit, however, they have extremely high standards in terms of what they require for 100% financing. Make sure when you do the calculation you pay attention to the cost to close section because I had a deal where everything looked good yet the cost to close for me was 30,000. For anything for 250,000 (Which is what they max you out at), that is way too high. As for their service though to answer your question in short, yes they are legit. 

What was the cost of the property? How did the closing costs get so high? Did they pay for all of the closing?

Do you by chance have a break down of the closing costs?

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If you complete the project your financing cost would be 15% and 5.5 points with a $650 fee ($3,000 down with a refund of $2,350 means you are putting $2,350 down on the property with a $650 lender fee).

Sounds like you pay closing costs and your down payment at closing, are you paying the I/O payments monthly or is it due after the sale?

Overall, I find DHM to be a lender that specializes in providing a low cash option for potential investors. They do it at increased costs, so if you have the money to use a "normal" HML that requires skin in the game in the form of a down payment, you will find better profits - but perhaps at the cost of cash-on-cash return. Normal HML is somewhere from 75-85% of purchase price and 100% of rehab at 12% and 3 points. Loans typically are above $75k as well (purchase lending + rehab lending). DHM is a legitimate lender that isn't going to take your money and not answer the phone (at least from my experiences talking with their LO's and borrowers). I don't have any affiliation with them.

@Kerry Boyle Thanks for the insight! I just spoke with them this morning. But it all sounds too good to be true, so it made me a bit leery.


Is there anyone that's successfully funded a flip through this lender? 

And thanks @Alec Rosario for opening up this thread. I was just about to do the same. Please keep this thread updated if you decide to move forward. 

My biggest concern is that they make me give the $3k deposit, and then siphon it all off through multiple $650 charges, without ever actually funding a deal. 

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@Kerry Boyle If I’m understanding this correctly, I don’t make any monthly payments at all, including for interest only. Everything is paid off when profits are posted to the account. 

15% is steep! The way their phrasing things made me uncomfortable. They kept complimenting me and they didn’t even really ask about my deal. Yet they wanted payment upfront right there at the end of the conversation. I’m sure they have a proven method. But 

@Brandon Jackson No I did not use them. Found private money instead which only would cost me 7% as opposed to the high interest rate. But the deal fell through anyway. Still looking for the next one. 

They are legit.  I am on my second fix and flip with them now.  

Originally posted by @Alec Rosario :

@Kerry Boyle If I’m understanding this correctly, I don’t make any monthly payments at all, including for interest only. Everything is paid off when profits are posted to the account. 

15% is steep! The way their phrasing things made me uncomfortable. They kept complimenting me and they didn’t even really ask about my deal. Yet they wanted payment upfront right there at the end of the conversation. I’m sure they have a proven method. But 

 You make your first payment on month 5.  but until then no they want you to focus on the project.  I get my properties done and sold within that time frame so I don't have to pay anything but it comes out of the back end of the loan which they show you up front on the Deal Analysis.  

Paula, as far as the $250K goes...is that the total amount, including 70% ARV, Repair Costs, and Closing Costs? Or do they give the $250K just for the purchase and then tack on additional funding for Repairs, Closing, etc?

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