100% Hard Money Financing
I know, all over the Internet it says you can get 100% hard money loans for your deals. And you can, IF you have a true private lender or friend financing you. You may even find a reputable person to partner on a deal with you, and bring in funds.
Beware of websites promising 100% Hard Money Loans. Most of them exist to take your “membership fee” or other large upfront fees totaling thousands of dollars. DON’T do it.
They make most their money from charging up front fees, NOT lending money. Although a few of them may actually do a loan for a slam dunk killer deal, if they do, they’ll end with most of the potential profit too.
Real Hard Money Financing
In my world, we require you to have some money invested in the deal. In short, if you’re not willing to put your money in the deal, why should I?
Yes there are investors who may be able to back you. Some companies will consider if its a real good deal
For budgeting purposes, plan on 20% of the purchase and rehab funds from your own money, plus closing costs. Most loans we do end up at 15% from you, but you should plan appropriately. On the low side, you may need as little as 10% of the purchase price, and get all the rehab funded for you. It really depends on the specifics of the deal, and your experience.
Upfront fees? Maybee, you should only pay it AFTER they approve you AND approve your deal.
Remember there are a lot of fees like appraisal, underwriting etc. Just do your research on these lenders first !
Nice post there was a thread on Do hard money actually been many of them. they will actually fund 100% but you need to pay them a 3k fee or there about up front with no guarantee of funding then its something like 650 per submission according to those who have tried it and posted on BP .. so many of the folks posting on the thread about the company paid the up front money 2 to 3k the 650 submission fees a few times and the deals were never good enough in the eyes of the funding company.. so there you go out 3 to 4k and time and effort.. some on top of it some were naïve enough to put down non refundable EM with a wholesaler and lost that as well.
its quite a model... little to no down side risk and prey on newbies who are the most vulnerable and want to get into the game and I suspect most of them even pull the 2 to 3k fee off of credit cards.
So what do you have
1. newbie ( does not really know what a deal is yet
2. limited capital but burning desire so they risk the 2 to 3k
3. only a screaming deal gets funded as you stated.. newbies generally don't fall off the truck into screaming deals.
then you have on the internet what I call pump and dump due diligence scammers these are flat out crooks of the Nigerian prince scam mode.. promise you 3% loan 100% two e mails and your approved.. broken English just need 500.00 to move forward... LOL. cant imagine how many people get sucked into this..
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