I'm looking at short term financing options for a BRRR deal in New Bedford, Massachusetts. I cam across Finance of America Commercial and spoke with a representative who sent me over an application packet for a line of credit product.
Has anyone ever worked with them or similar hard money type lenders? I want to make sure they're legitimate before proceeding with the application process. Any insight would be appreciated!
Also, if anyone knows of any reputable private or hard money lenders in the New Bedford / Fall River area then I'd love to connect!
@Aaron Araujo ask me for some connections tonight and I will give you a few options based on your needs. I have a bunch of different local finance guys! See you then!
I figured you would, thanks @Gualter Amarelo ! See you later!
I've run across them. They advertise really good rates, but they have some pretty hefty junk fees. Last time I checked, they wanted me to pay $1,500 before even getting approved for a loan. I'm not a fan of lenders that make you pay money up front to apply for their loan.
Can't argue with that @Nghi Le , thanks for the input! I'm communicating with some local short term lenders that will hopefully work out better.
Don't forget national lenders!
I considered them for a deal I was working on. They were not super responsive and the terms were not as favorable as I was looking for. That being said they did refund my $500 application fee after I said I was not interested in proceeding.
@Aaron Araujo I just came across Finance of America and am considering using them -I am also based in MA. Do you mind sharing the other short term lenders you are using instead?
Bumping this up. Would love to hear everyone's feedback on FOA Commercial.
FOA advertises stellar rates on all of their programs, but the reality is that they underwrite like a bank and it will take 3-5 weeks to close the deal. They have a lot of fees, and I have broker friends who have stopped using them due to the poor customer service and communication. If you're willing to work for the rates and run the risk of not being able to close on time, then they're a viable option.
They're one of the many national HMLs that have introduced prohibitive amounts of red tape to their underwrite. DM me and I'll be happy to share more info.
I have to agree with @Stephen Herbert . They have fairly strict guidelines for a HML compared to someone you might find locally.
I've borrowed from 15 different hard money lenders before. I was drawn in by FOA's rates and terms. I mean 8% and 1pt? That's amazing. I was originally turned off by their upfront fees (see my earlier post), but I got past that a little and wanted to give them a shot for a deal. Then they told me that they typically close in 30-45, and I said, "Goodbye."
That's essentially a conventional loan, but conventional products for rehabbing (i.e. 203k and HomeStyle Renovation) are cheaper. So the market they operate in just doesn't make sense; they can't beat the banks, and they can't beat the hard money lenders.
Using them now and have to agree with @Stephen Herbert ; extremely poor communication, incredibly slow, and much like working with a typical bank -- but worse. They keep asking for docs I have supplied multiple times, have missed 2 closing deadlines, ask for info they told me they didn't need for commercial loans, and I really regret getting involved with them now. However, I have 2 in-progress and am too far down the stream to change horses now.
Oh, and by "slow" I mean they have taken longer on 1 property (coming up on 90 days!) than it will take me to rehab and sell it -- and I have good credit and reserves.
If folks have other options for flips, BRRR, and buy/hold, then please do share. I have another 2 deals in the hopper but don't want to move until I get these 2 closed.
Thanks for sharing @Chuck Kramer . I'm planning on using LendingOne for my upcoming financing, once I hit the 6 months seasoning mark. Seems like folks have generally had a good experience with them.
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