New Bedford, MA · Member since 2015 · 71 posts · 48 votes
Hey Everyone!
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!
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.
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'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.
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?
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'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.
Thought I'd revive an old thread. I am using an FOA line to fund the two deals I'm working on now. The rates and fees are competitive among hmls and pmls... however everything else is akin to an FHA loan and completely not worth it.
As others have stated, I was continually asked for the same documents multiple times and there is an extreme lack of communication internally. My first deal ended up almost getting pulled and I paid an additional $700 in extension fees because they couldn't close, and the second was delayed a full week initially and then a day at a time.
Yesterday, we were supposed to close but they were never able to get documents over and also never told my title company the situation. As a result, my seller and his agent were stuck sitting at title for an hour and had to walk away empty handed and angry. They said they would get everything out for a 9am close today and at 8:45 I called the title company to make sure. They didn't have anything. It turned out that they had sent the closing packet to a different title company almost two hours away, and then tried to blame me for giving them the wrong name! We ended up closing 2.5 hours later.
Stay away. Unless you have 6 weeks to devote to closing a loan and room for a few heartattacks along the way. I'll see how the draw process and loan completion goes, but I'm now in the market for a new funding source.
Thought I'd revive an old thread. I am using an FOA line to fund the two deals I'm working on now. The rates and fees are competitive among hmls and pmls... however everything else is akin to an FHA loan and completely not worth it.
As others have stated, I was continually asked for the same documents multiple times and there is an extreme lack of communication internally. My first deal ended up almost getting pulled and I paid an additional $700 in extension fees because they couldn't close, and the second was delayed a full week initially and then a day at a time.
Yesterday, we were supposed to close but they were never able to get documents over and also never told my title company the situation. As a result, my seller and his agent were stuck sitting at title for an hour and had to walk away empty handed and angry. They said they would get everything out for a 9am close today and at 8:45 I called the title company to make sure. They didn't have anything. It turned out that they had sent the closing packet to a different title company almost two hours away, and then tried to blame me for giving them the wrong name! We ended up closing 2.5 hours later.
Stay away. Unless you have 6 weeks to devote to closing a loan and room for a few heartattacks along the way. I'll see how the draw process and loan completion goes, but I'm now in the market for a new funding source.
Just looking to see how things are progressing with draws and loan completion.
I am at the beginning stages of dealing with them. I am trying to complete a deal now in which all I have to come up with is the 10% acquisition down payment and 5% estimated rehab cost. Im trying to avoid providing any money at all at closing by using seller assist or something similar. They are telling me that's not possible which doesn't make sense to me. Any idea how to work around this to avoid paying closing costs?
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.
I was also considering them for an LOC which I got a term sheet but after getting some more information on turnaround times (which could be 3 to 5 weeks) its just not going to work for me with that kind of a time-frame to close.
I am currently looking into CoreVest where I got pre-approved based on the liquidity and financial statement/assets etc. The term sheet I have from CoreVest is 9.95% IO with 2 points per advance (per deal). They were called 'Colony American Finance' and have a good reputation and much quicker turn around times usually 7-10 days and I was told that they'd be able to accomodate quicker turnaround times. I have a call with the underwriter this afternoon so let's see how that goes.
I am using them for a deal. Submitted docs over the weekend, called on Monday. Haven't heard anything from them. I'm ok with the fees, they are loaning 8.5% at 1pt with a huge credit line for me, seems like some of you want them to work for free. I'm not closing for 45 days so hopefully all goes well. I rather wait then let some HML drill me at 14%/4 points.
I used them for a long term refinance. As others have said, I had to send over the same documents multiple times and their communication is awful. I ended up closing the refinance the day my HML balloon payment was due, so needless to say it was a stressful experience. The rates are good, the fees are pretty high. I paid about 3 points to get my rate to 5.5% 30 year fixed, but over the long term the math worked out. Probably wouldn't use them again other than a last resort.
Because of shockingly low appraisals and a nearly impossible draw schedule, I have had to put one of my renovations on hold because they are not paying out how you would think they would. It's a long story but frustrating.
On my other property I got the roof done, paid my guys, and then submitted a draw request for the roof $8500. The inspector came out the next day and then 7 days went by. I called every single person at FOA I had a number for and no one answered. Finally, on day 9 I was told that they couldn't close my loan becuase of outstanding conditions... THE LOAN IS ALREADY CLOSED I JUST WANT A DRAW. On day 11 the money finally arrived in my account.
Last week I got a notice from them that I was to be charged $640 per month for property insurance because my insurance had lapsed. MY INSURANCE HASN'T LAPSED. Another angry phone call to get that cleared.
My costs on top of the loan costs using FOA are piling up. At this point it is basically hard money costs. In addition to the points and fees etc, I am paying: extra CC interest, personal loan interest, a 2017 tax late fee because they didn't fund until July 1 instead of June 29 so the city hit me with another fee, and $700 in extensions from a seller.
I checked on FoA after the bigger pockets ad email recently. I’m looking at using their LoC to purchase some duplexes that are correctly rented it and then refi them later
After filling out the app and sending financial statements, I was told there was a $750 application fee. I didn’t see that mentioned anywhere on the website before hand. I get having an origination fee on a loan, but this is just the app.
Has anyone else experienced this? I’m concerned I’ll spend my money and then not get approved to use the funds I’ve been “approved” for
Update: I applied Sept 10th using a broker. FOAC is basically unresponsive and completely unorganized and my broker tells me he yells at them (doubt it). I was supposed to close Friday (2 weeks earlier than originally intended) and we missed that deadline because the appraiser couldn't do his job properly. FOAC called me today and basically told me I had to tweak how I was submitting my loan because they description I put would get rejected in underwriting (they waited 4 weeks to tell me this). I have very little faith they can get my loan closed based on what I read here and their actions haven't calmed those concerns. I told them I need to close my deal this Friday and I've already started reaching out to other hard money lenders just incase they can't deliver. At this point, I don't think I'll use them again, I don't care how large of a credit line I got approved for.