Hard Money Broker Fees
I've done a couple of deals years ago, and was planning to start a real estate business full-time this Spring. But, I lost my job due to the pandemic and have used up my down payment savings on living expenses. I have a fix-and-flip deal lined up (or possibly fix-and-hold.... undecided). And now, I need 100% financing, which I understand is hard to get.
I don't have private lenders on my team yet. So, I'm attempting to use a hard money loan for the first time. I found a loan broker on Bigger Pockets who assures me he can find a suitable lender, including gap funding to cover the cost of the down payment. Sounds good so far, right? However, he asked for my repair list! I sent my notes (minus the property address). But now I'm thinking, maybe I shouldn't have!?! He's also asking for an up-front $500. "application fee" which he says will be applied toward the loan.
Are these requests standard? Nobody ever asked for my building plans on previous flips. Plus, that's a big chunk of change to pay up-front with no guarantee he's going to get me the loan!!! My Spidey sense is on high alert! Am I just being paranoid?