"Do Hard Money" - Anyone Familiar?
Washington, DC · Member since 2018 · 65 posts · 35 votes
"Do Hard Money" - Anyone Familiar?
Most Popular Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesOriginally posted by @Ryan Wright:
Disclosure- CEO DoHardMoney
@Ryan Blake - no one 'loses' the $3000 'deposit' because it is not a deposit, but the enrollment cost for the progema in which they enrolled. If they give up because finding a property was harder than they thought is was going to be they still have the program that they paid for. They still have the software, the deal desk team, the phone support etc.We have some people come here to this forum claimer that we would not fund any deals for them when we have even extended a loan offer to them on properties. Not every deal we fund will qualify for no cash to, no do we ever promise that if they enroll that we will fund a deal that does not meet that criteria at 100% just because people are enrolled. Most of the deals we fund do require some cash to close, but there are many where we can fund 100% of the purchase price, 100% of the rehab costs and 100% of the loan costs.
What is often misunderstood is that when we look at the profitability of a deal we look at all costs, even those not part of our rates or fees, like holding costs and agent commissions.If a deal is not profitable after those things have been considered then we don't extend funding. So other lenders may laon on a property that we will not because they are not concerned with whether or not the borrower makes a profit, only with their costs being covered.
When we take on the risk of lending to someone who has never flipped a house before, or someone with a low (say 580) credit score, or of funding 100% of the entire deal we do need that borrower to utilize our Find-Fund-Flip System. If a borrower doesn't fall into one of those higher risk categories (or their partner does not) they need not enroll. We can extend funding to them through one of our other loan programs.
We are not perfect, nor are we the best lender for every investor, but no one 'loses' a deposit.
Also- to address the local lender question, we use 2-3 independent evaluators in the immediate area to help us determine the profitability of a deal. These are professionals who have no stake in whether or not a deal will receive funding. Before we extend a loan offer 18-24 comps are required. We look at not just the comps, but we also need to be relatively sure that the property can sell within the loan term, which makes the guidelines for that type of loan very tight. Many times the deal itself will qualify for another of our loan options with a down payment or monthly payments, but the borrower either doesn't have the cash needed or cannot qualify because of credit. If you want 100% purchases price funding, 100% rehab cost funding, 100% loan cost funding and no monthly payments the deal must meet those very tight guidelines.
thanks for chiming in .. as you probably know the lady who was the owner or last CEO had a hard time spelling out what they did when all the complaints came in from those who thought 3k basically bought them the right to a loan.. and that they would get their 3k back once you funded one.. It took Kristi Hawkins to flush out how you actually do these deals with the LLC and such.. but she still thinks you dont need the 3k however person after person jumps on here and says its not true .. so i suppose if you don't require the 3k you probably have a loan product which require some sort of cash down like every other lender on the planet.. I get that 100% financing exists i have done it for 20 plus years .. just never charged people for the privilege to borrow money from me.. but i will say for my 100% financing i get paid a premium. and I am not looking for new beginners unless I like them or they are in a market I have a lot of support in.
Just be nice if you guys spit out what you do.. I have not checked rip off report to see if your there.. but on BP you have some folks that are not happy.. and who lost the 3k ( bought your systems) and lost your 600 dollar inspection fees multiple times and lost EM because the deal was not good enough.. so NO money down advertising led to these folks losing 3 to 5k . so you can see the heart burn..
26 Replies
- Rental Property Investor · Chicago · Member since 2018 · 612 posts · 1k+ votes7y
Hi @Tomiko Graves I do not work with them but there are a couple of mixed reviews on BP. Sounds like harder to get your deals approved/funded after your upfront payment is the main theme.
https://www.biggerpockets.com/forums/92/topics/323...
https://www.biggerpockets.com/forums/67/topics/564...
- Mesa, AZ · Member since 2018 · 24 posts · 9 votes7y
Is it standard? No.
And I'm not just talking about us. I know (and actually respect) a lot of other hard money lenders, and while we offer somewhat different products and approach things differently, there are very few I know that would charge a fee like that.
Hope it helps. Good luck on your project. - 7yRyan BlakePro MemberLender · TX · Member since 2018 · 936 posts · 713 votes
@Tomiko Graves It is extremely UNCOMMON for a legit HML to request funds up front. Most HMLs don't even charge an application fee unless you actually close on a loan. You shouldn't need to pay just to have access to a hard money lender. I work for one, we are a dime a dozen. Each one will have things they specialize in but for the most part, the fees are very similar. Do you want to know why? Because we all have very similar expenses. We have an office, marketing, and staff to pay. We have investors who are promised between 9 - 11% returns. Therefor, we all end up charging very similar rates. Go with someone local that you know, see face to face, and most importantly trust.
Hope this helps some.
- Washington, DC · Member since 2018 · 65 posts · 35 votes7y
Wow. Thanks everyone. Super helpful!
- Washington, DC · Member since 2018 · 65 posts · 35 votes7y
@Tom Shallcross thanks for the links about the company! Very informative. I'll keep looking.
- 7yChristi HawkinsPro MemberColumbus, OH · Member since 2017 · 237 posts · 142 votes
@Tomiko Graves the $3000 is not just for the evaluations or "skin in the game" It is to be able to access their 100% financing programs and gives you access to an amazing set of educational tools to help you find deals, analyze them and several other educational tools to help you become a better investor. The $3000 IS NOT MANDATORY unless you want 100% financing. I have been working with them for about 6 months and I've decided to use them for my first flip this year. I made that decision based on endless conversations with their office and the endless amount of support I've received. You are going to hear a great deal of negative comments about them on this website, most from people with zero working knowledge about the company. I can assure you they are legit, they want to help you be successful and they will be with you every step of the way. I"m think a lot of the folks on here that are quick to respond so negatively are the same ones who gave up after the first deal they submitted didn't get approved.
- 7yJonathan Taylor SmithBusiness MemberRental Property Investor · Durham / Raleigh (Triangle), NC · Member since 2015 · 840 posts · 801 votes
@Christi Hawkins & @Tomiko Graves - Do Hard Money may very well be "legit"; however, I came into contact with them earlier in my investment career and at that time (it may have changed since then) the upfront fee was NOT optional... It was very much mandatory and it was not associated with any tools, education or required only to access 100% financing. It was the "price to play" / to be a part of their system, which included submitting potential deals to be evaluated by others in the system; which itself was presented as a potential source of additional income for me thereby evaluating the deals of others.
Further, they took and charged my credit card for this fee PRIOR to providing the contract for review and signing. But upon reading this contract the wording (at that time... again, maybe it has changed since) made it clear to me that they were in no way required (or even likely) to fund my deals. In fact, it gave me the distinct impression that I may never get a deal funded and that it was a SCAM to get my upfront payment (maybe not, but that is the impression I got) - and one of my favorite quotes is "Just because I'm paranoid, doesn't mean they're not out to get me!"
Maybe they've since cleaned up their act, but they should have better explained everything and provided this contract for review BEFORE taking my money. So I refused to sign and demanded a full refund, which became a fight. A couple of escalated calls later, I got my refund along with a threat that I'd never get funding from them in the future - which I did not care about anyway, since from reading the contract I doubted they were going to fund anything anyway.
I quickly found another HML who did not require an upfront fee (I did pay for appraisal and inspection) and got my deal funded elsewhere. Since then I've worked with several lenders and not a month goes by that one or more of them does not call or email me asking if I've got any deals pending for which I'll need funding - plus my rates, points and fees are all excellent with each lender.
You don't need, Do Hard Money... They need you, so why pay them anything upfront!?
Blue Chariot Realty & Management4.915 Reviews - Washington, DC · Member since 2018 · 65 posts · 35 votes7y
@Jonathan Taylor Smith thank you so much. I honestly don’t feel like much has changed since your experience with them. I agree that the $3000 was NOT optional...
Do you mind sharing which HML you went with and if they were willing to lend to an individual or only an entity?
- 7yJonathan Taylor SmithBusiness MemberRental Property Investor · Durham / Raleigh (Triangle), NC · Member since 2015 · 840 posts · 801 votes
@Tomiko Graves, each HML I have worked with required lending to an LLC... Send me a PM.
Blue Chariot Realty & Management4.915 Reviews - 7yRyan BlakePro MemberLender · TX · Member since 2018 · 936 posts · 713 votes
@Christi Hawkins I know you say that most people on here have no working knowledge, what do you say about all the people on here who have said they lost their $3000 deposit after six months of getting every deal rejected by them? I also see that you haven't done a deal with them either yet, so I don't think you are the expert on using them either.
@Tomiko Graves I know of a few different HMLs offering 100% financing for purchase and rehab on flips and rentals that do not charge you anything to be a part of their program. And I always suggest working with a local company when you can. They will give you free info and education because they know your market and they know what deals will do well and what deals won't.
In the end, trust your gut after doing the research. I don't think it is a mystery that there are far more negative reviews than positive on this site from actual users.
- Lender · West Jordan, UT · Member since 2011 · 32 posts · 20 votes7y
Disclosure- CEO DoHardMoney
@Ryan Blake - no one 'loses' the $3000 'deposit' because it is not a deposit, but the enrollment cost for the progema in which they enrolled. If they give up because finding a property was harder than they thought is was going to be they still have the program that they paid for. They still have the software, the deal desk team, the phone support etc.We have some people come here to this forum claimer that we would not fund any deals for them when we have even extended a loan offer to them on properties. Not every deal we fund will qualify for no cash to, no do we ever promise that if they enroll that we will fund a deal that does not meet that criteria at 100% just because people are enrolled. Most of the deals we fund do require some cash to close, but there are many where we can fund 100% of the purchase price, 100% of the rehab costs and 100% of the loan costs.
What is often misunderstood is that when we look at the profitability of a deal we look at all costs, even those not part of our rates or fees, like holding costs and agent commissions.If a deal is not profitable after those things have been considered then we don't extend funding. So other lenders may laon on a property that we will not because they are not concerned with whether or not the borrower makes a profit, only with their costs being covered.
When we take on the risk of lending to someone who has never flipped a house before, or someone with a low (say 580) credit score, or of funding 100% of the entire deal we do need that borrower to utilize our Find-Fund-Flip System. If a borrower doesn't fall into one of those higher risk categories (or their partner does not) they need not enroll. We can extend funding to them through one of our other loan programs.
We are not perfect, nor are we the best lender for every investor, but no one 'loses' a deposit.
Also- to address the local lender question, we use 2-3 independent evaluators in the immediate area to help us determine the profitability of a deal. These are professionals who have no stake in whether or not a deal will receive funding. Before we extend a loan offer 18-24 comps are required. We look at not just the comps, but we also need to be relatively sure that the property can sell within the loan term, which makes the guidelines for that type of loan very tight. Many times the deal itself will qualify for another of our loan options with a down payment or monthly payments, but the borrower either doesn't have the cash needed or cannot qualify because of credit. If you want 100% purchases price funding, 100% rehab cost funding, 100% loan cost funding and no monthly payments the deal must meet those very tight guidelines.
- Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes7y
@Ryan Wright great info! What is the percentage of deals that you have funded 100% vs. Needing some money upfront?
My thought is that if you fund 1 out of 10 at 100%, most would probably be better off not enrolling in the $3000 program. Because, let's face it, the 100% funding is the real draw. I know you offer other things for the enrollment fee, but those other things can be found for free, or nearly free elsewhere. Now, if you tell me that 75% of your deals are 100% funded, that changes the ballgame a little.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Ryan Blake:
@Tomiko Graves It is extremely UNCOMMON for a legit HML to request funds up front. Most HMLs don't even charge an application fee unless you actually close on a loan. You shouldn't need to pay just to have access to a hard money lender. I work for one, we are a dime a dozen. Each one will have things they specialize in but for the most part, the fees are very similar. Do you want to know why? Because we all have very similar expenses. We have an office, marketing, and staff to pay. We have investors who are promised between 9 - 11% returns. Therefor, we all end up charging very similar rates. Go with someone local that you know, see face to face, and most importantly trust.
Hope this helps some.
Ryan you may be late to the Do hard money threads.. the attraction of this company is that they say they do 100% financing etc.
its hard to get info out of them but one lady actually posted how they do their deals.. with the no money down.. which in fact is not no money down since you have to pay 3k to even be considered for a loan.. however it appears at least from other posters that these are not loans like your thinking off. this is a quasi JV deal that most beginners will not really understand.. title is taken in an LLC the borrower and DHM own.. in the event of a default ( which not sure what constitutes a default) DHM simply removes borrower from LLC and they now own the asset without having to foreclose.. ( which i think is a perfectly acceptable way to deal with beginner newbies.
the major heart burn you hear from those that have paid the 3k and never got funded is that the deals are never good enough. And granted again i dont blame them if your doing 100% but the reality is new investor limited experience relying on lender those folks rarely get great deals. so you have a lot of turn downs and of course DHM counters with the 3k is for their propitiatory system and information to do flipping so its really at that point pay 3k for information and maybe its great information and worth 3k.. but it really just confuses the issue for most and especially all of us that have been in the HML trench's it took a few years for all this to flush out as the company would say the 3k is not mandatory.. then others who call their closers say it is.. so who knows where the truth lies. but i think if we can believe a few posters they actually got funding.. But this is not like Lendinghome or lima one or Visio or any of the other semi national lenders.
- 7yRyan BlakePro MemberLender · TX · Member since 2018 · 936 posts · 713 votes
So this is a thread on someone asking about your company or the company you work for. Do you respond on this site to the numerous complaints? If no, why not? As @Jay Hinrichs who has over 26k comments on this site says, you may be a little late to the game to try and save the appeal of DoHardMoney.
And the $3k is for education, not for loans? You will lend to people who don't pay the $3k?
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Jason D.:
@Ryan Wright great info! What is the percentage of deals that you have funded 100% vs. Needing some money upfront?
My thought is that if you fund 1 out of 10 at 100%, most would probably be better off not enrolling in the $3000 program. Because, let's face it, the 100% funding is the real draw. I know you offer other things for the enrollment fee, but those other things can be found for free, or nearly free elsewhere. Now, if you tell me that 75% of your deals are 100% funded, that changes the ballgame a little.
Jason if they have a call center and all these reps.. there is no way a Hard money lender will have that kind of support staff to feed just based on fees so there has to be SIGNIFICANT income coming in on the 3k selling the system.. which again is fine. its just a little bit of smoke and mirrors that beginners have a hard time navigating reality.. same thing when people spend 40k to go to a flipping 5 day bus tour.. these are all supported from call centers in Utah I know i have been to many of them in person.
When i had my company we had about 35 million out.. ( small to medium) and that took a staff of about 10 to run.. and we had no one working the phones or supporting borrowers like they talk about.. and we did a TON of 100% financing we were one of the top BRRR lenders in the country.. we invented BRRR before BP was even founded.. LOL.. so lots of experience in the space. and there is HUGE risk to zero down lending if your going to do it to the general public and beginners. so really its a pretty genius marketing model.. those Utah fulfillment companies are very good at what they do.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Ryan Wright:
Disclosure- CEO DoHardMoney
@Ryan Blake - no one 'loses' the $3000 'deposit' because it is not a deposit, but the enrollment cost for the progema in which they enrolled. If they give up because finding a property was harder than they thought is was going to be they still have the program that they paid for. They still have the software, the deal desk team, the phone support etc.We have some people come here to this forum claimer that we would not fund any deals for them when we have even extended a loan offer to them on properties. Not every deal we fund will qualify for no cash to, no do we ever promise that if they enroll that we will fund a deal that does not meet that criteria at 100% just because people are enrolled. Most of the deals we fund do require some cash to close, but there are many where we can fund 100% of the purchase price, 100% of the rehab costs and 100% of the loan costs.
What is often misunderstood is that when we look at the profitability of a deal we look at all costs, even those not part of our rates or fees, like holding costs and agent commissions.If a deal is not profitable after those things have been considered then we don't extend funding. So other lenders may laon on a property that we will not because they are not concerned with whether or not the borrower makes a profit, only with their costs being covered.
When we take on the risk of lending to someone who has never flipped a house before, or someone with a low (say 580) credit score, or of funding 100% of the entire deal we do need that borrower to utilize our Find-Fund-Flip System. If a borrower doesn't fall into one of those higher risk categories (or their partner does not) they need not enroll. We can extend funding to them through one of our other loan programs.
We are not perfect, nor are we the best lender for every investor, but no one 'loses' a deposit.
Also- to address the local lender question, we use 2-3 independent evaluators in the immediate area to help us determine the profitability of a deal. These are professionals who have no stake in whether or not a deal will receive funding. Before we extend a loan offer 18-24 comps are required. We look at not just the comps, but we also need to be relatively sure that the property can sell within the loan term, which makes the guidelines for that type of loan very tight. Many times the deal itself will qualify for another of our loan options with a down payment or monthly payments, but the borrower either doesn't have the cash needed or cannot qualify because of credit. If you want 100% purchases price funding, 100% rehab cost funding, 100% loan cost funding and no monthly payments the deal must meet those very tight guidelines.
thanks for chiming in .. as you probably know the lady who was the owner or last CEO had a hard time spelling out what they did when all the complaints came in from those who thought 3k basically bought them the right to a loan.. and that they would get their 3k back once you funded one.. It took Kristi Hawkins to flush out how you actually do these deals with the LLC and such.. but she still thinks you dont need the 3k however person after person jumps on here and says its not true .. so i suppose if you don't require the 3k you probably have a loan product which require some sort of cash down like every other lender on the planet.. I get that 100% financing exists i have done it for 20 plus years .. just never charged people for the privilege to borrow money from me.. but i will say for my 100% financing i get paid a premium. and I am not looking for new beginners unless I like them or they are in a market I have a lot of support in.
Just be nice if you guys spit out what you do.. I have not checked rip off report to see if your there.. but on BP you have some folks that are not happy.. and who lost the 3k ( bought your systems) and lost your 600 dollar inspection fees multiple times and lost EM because the deal was not good enough.. so NO money down advertising led to these folks losing 3 to 5k . so you can see the heart burn..
- Member since 2019 · 5 posts · 0 votes7y
@Jonathan Taylor Smith
Who have you used since you didnt use DHM?
I'm considering them but would love to compare
- Member since 2019 · 5 posts · 0 votes7y
@Ryan Blake
Could you provide some alternative HML's since DHM is getting such a bad wrap?
- Baltimore, MD · Member since 2019 · 80 posts · 47 votes7y
@Austin Durham, let me know if you identify other HML.
Thanks, LuAnn
- 7yRyan BlakePro MemberLender · TX · Member since 2018 · 936 posts · 713 votes
@Austin Durham It looks like you are in Arkansas based on looking through your posts. Location matters. Most lenders are not 100% nationwide and many will only lend in major metro areas. I think it is best to always go local. Find out who is in your area by going to the state listing of HMLs here on bigger pockets. Then start calling. If you are in Little Rock or another larger area you should expect to be at 70% LTV with 3 points and around 13% interest and probably 85 - 90% initial funding. You might be able to find more on the initial funding if you search but it also may come with some higher fees.
- Washington, DC · Member since 2018 · 65 posts · 35 votes7y
Thanks @Ryan Blake
I am in DC and am using Bridgewell Capital and likely Flip Funding. They lend for long-distance flips more than 60 miles away; which is important to know as some lenders only lend if you live within a 60 mile radius of your flip.
- Developer · . · Member since 2014 · 520 posts · 162 votes7y
@Tomiko Graves did you get the 100% financing?
- 7yRyan BlakePro MemberLender · TX · Member since 2018 · 936 posts · 713 votes
@Tomiko Graves Just know there is a reason many companies do that. It is because there is a very high failure rate among long distance flippers. Just make sure you have multiple people in the area of your flip you trust. I would have an agent who you plan to list with, your GC who will be sending you daily or every other day updates with pictures, and a local investor or some other person who can check in on the project other than your agent. You want these people keeping each other honest. It will be your best chance of success. You should also visit the site at the 50% completion mark, 90% mark, and a final walk through after everything is done before you release the last funds. I know it can be expensive getting out there those three times but it could save you thousands in the long run.
- Washington, DC · Member since 2018 · 65 posts · 35 votes7y
@Ryan Blake thanks!
I have two out of three (agent and GC). Glad you mentioned the third person to also check in to ensure the other two are held accountable. Hadn't thought about that, but now will!
I read David Greene's book Long-Distance Real Estate Investing (and other books as well) before I jumped in.
Thanks again!
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