Do hard money
Maurice, LA · Member since 2014 · 9 posts · 2 votes
Do hard money
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesAny lender that charges money up front ( other than modest credit pull say 50 bucks) and for an appraisal. is not one you want to waste time with in my mind. There are many lenders or company's that just make money telling you you are pre approved but we need 2k for DD or some horse stuff like that especially bigger commercial deals. Although lending is strictly regionalized what one hard money lender does in your neck of the woods and what one does in mine can be far different. The day of just lending on the asset is really gone with most of the company's that have been in bizz for any length of time. they will underwrite a file but will want to see decent credit, tax returns and experience etc etc.. We do a true NON recourse loan but its at 50% of cost, and the home has to have already been rehabbed and in great shape, No straight LTV loans for me to much hanky panky in that arena.
Also go to the Scottsman Guide there will be a whole list of reputable lenders there I would start with that one.
70 Replies
- Hard Money Lender · West Jordan, UT · Member since 2015 · 105 posts · 75 votes10y
Disclosure - I am the Director of PR for Do Hard Money
Our business has changed in the last two years, and we'd like to outline how we do business
At DoHardMoney we do things a little different than most Hard Money Lenders and as a result we’ve disrupted things in a way that competitors feel the need to raise doubts and concerns about our systematic approach and our business model. In addition, we occasionally get individuals that “know someone” that’s done business with us and because of the unique approach new investors can get confused on the process we follow.
So here’s a breakdown of questions and concerns that frequently come up.
- 1.First and foremost, if you are a customer and you’ve had an experience that’s caused you any frustration we’d invite you to contact us directly and give us an opportunity to resolve your concerns.
- 2.Most Hard Money Lenders require 10-20% Down, decent credit and some experience. We have no down payment requirements. If you have 10-20% down we might not be the best option for you, but for the individual that's looking at a high ROI by not having to bring a lot of money to the table we might be your best option. Also, we work with investors that have bad credit and we don't require past experience.
- 3.Our Interest Rate is 15-18% as an Annualized Rate. Our standard loan is a 5-month term which puts the effective rate at 6.25% - 7.5%. So a loan of $100K would have an interest rate of $6,250 to $7,500. Compared to a loan with a 12% interest rate you’re looking at a difference of $1,250 - $2500.
- 4.Each property does go through an evaluation process where we send out 2-3 local independent evaluators to the property to determine the After Repair Value of the property. They are local licensed real estate agents that are active in the local community. They pull 3 active and 3 sold comps in addition to completing an interior evaluation of the property with an initial breakdown of needed repairs to get the property in resalable condition. The evaluation process does require $650.
- 5.In part, with the evaluation process, you are paying for a quick turn time. Our Evaluators will be out to the property within 24-48 hours of us reviewing your loan application with you. If the initial numbers look good there’s no time to waste and we understand the need to get the results of the evaluation back to you ask quickly as possible.
- 6.The draw back to an appraisal, you’re hanging your hat on one individual’s opinion, the turn time is 5-10 business days, appraisers’ expertise is in establishing the As-Is Value not the After Repair Value.
- 7.We do require a $2500 deposit to get access to 100% Financing. We will finance up to 70% of the ARV with no required down payment. If you're purchase, rehab and closing costs are 70% or less you will bring nothing to the table. In addition to this, the deposit gives you access to the following:
- a.Advanced Deal Analysis Software – enter the purchase price, rehab costs and After Repair Value and we’ll give you a comprehensive break down including costs, net profit, and potential cash to close.
- b.Access to Proof of Funds – 24/7
- c.Contracts and Checklists
- d.Additional Tools & Resources to help you avoid common pit falls in evaluating, rehabbing, negotiating and reselling the property.
- e.Your first evaluation is covered with the deposit.
- f.If the needed funding is more than 70% but it’s still a profitable deal, we’ll work with you to potentially wholesale the property and still make money on the deal.
- g.The remaining $1850 is rebated back to you once you resale your first property.
- 8.Just like every other Hard Money Lender, one of the biggest challenges is helping new investors get dialed in on establishing accurate After Repair Values. Most complaints on bigger pockets are customers that are frustrated with the After Repair Value that’s established by our local evaluators. It can be disheartening when the values don’t come back as high as hoped. This frequently is a case of overly optimistic investors looking at a deal from a best case scenario. When there are disagreements with the potential borrower we do provide a dispute process allowing the customer to have us take a second look at the evaluations.
We’re not pretending to be something we’re not. For a lot of new investors with limited options we are often times the only viable option they have. We’re more than happy to give you a comparable breakdown of how our costs and cash to close compare to other Hard Money Lenders
- Real Estate Broker · Richland, WA · Member since 2015 · 76 posts · 50 votes10y
Timely topic for me as I just spoke with Do Hard Money earlier today.
While I feel like I have a fair bit of experience flipping, that experience has always been as the Realtor not the investor. One thing I am absolutely sure of is that I want a reliable, professional, honest lender in my corner as an investor prior to getting a home under contract. I want to know you will close and I want to know all the potential reasons you may no close up front prior to bringing you my deal.
Just recently one of my flip investors was left hung out to dry with no money to close when their lender decided he couldn't fund the 70% of ARV purchase they had under contract. That could have easily killed the deal but my clients were able to scramble to find another lender and close with a hard fought extension a week or so late.
So I called Do Hard Money to get a list of their rates, fees involved and the overall process. I found the rep I spoke with had a hard time communicating the program to me.
I suspect there was a delay on the phone line that caused this or maybe he was new IDK. But eventually I got the info I needed and decided that this particular company was only going to be my very last resort for funding. I could probably work around the fees but the upfront $2500.00 immediately tripped my trigger that I needed to research this company more.
I am still on the hunt for private lenders or a local lender with less negative feedback and hopefully without the 2 bpo requirement. I'm in the business and I know many bpo's aren't worth much more than a zestimate considering what most banks pay agents for them.
- Investor · Pine Mountain, GA · Member since 2013 · 2 posts · 6 votes10y
I just completed a deal with Do Hard Money and it was a GREAT experience. The loan processor Brittany Gamble was very attentive as well as informative throughout the loan process. It was a phenomenal experience.
- Norfolk, VA · Member since 2015 · 4 posts · 4 votes10y
Hi,
As I read these threads most of you, in fact, all of you forgot to leave a contact to the lenders you are currently dealing with. I read that @Jay Hinrichs bashed DoHardMoney but never provided us with any up to date feedback.
- 10yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Davaun Aquart just deal with HML in your local market.. and if you have no cash go get an equity partner.. that's a good way to start..
- Atlanta, GA · Member since 2014 · 25 posts · 5 votes9yJohn, I'm in the exact same boat. Curious if you ended up using DHM and if so can you tell me a little about how it worked out and any other hard money sources you have had success with and would recommend. Thanks
- Spring, TX · Member since 2017 · 1 post · 1 vote9y
I actually just got off the phone with Do hard money for the first time today. I was told there is a $3000 deposit fee that you pay upfront as part of the preapproval process and to gain access to their "back office" support and training materials. I was told once you complete your first flip that $3000 is returned back to you. It is also an option to deduct the appraisal fees, etc from that on your first deal. Does anyone have more recent experience with them? I am new to investing and trying to learn as much as I can on the financing side prior to my first flip. Thanks
- Hard Money Lender · West Jordan, UT · Member since 2015 · 105 posts · 75 votes9y
@Marc Noel - Hello!
While I know that you're hoping to hear from a DHM borrowers as well, I am going to take this opportunity to clarify our 100% Financing System. These things may have already been explained during your phone call, but I will take this opportunity to make things a bit more clear.
Yes, enrollment in our 100% Financing System is $3000. You DO NOT need to enroll in this program in order to obtain funding from us, but there are many benefits to joining.
- Access to 100% financing for any deals that qualify. (enrollment does NOT mean that we will fund any deal members bring to us. An unprofitable deal won't get funded, a property that doesn't stand much chance of selling during the term of the loan won't get funded etc.)
-DHM will fund up to 70% of the ARV. That 70% can include purchase, rehab and loan costs. Anything above the 70% is cash you'd need to bring to close. We fund many profitable deals where the borrower brings cash to close as well as providing 100% financing when appropriate. We don't cover other things like earnest money or any marketing costs incurred when finding a property (we're a lender, a rich, doting uncle :) )
-Those that do enroll have access to tools and resources that help them to not only find a good deal, but to find one that qualifies for our criteria. We DO occasionally turn away deal that eventually get picked up by other lenders because we need to be more careful, as we are taking on much more of the risk. We have data on the risk and profitability of enrollee deals vs. those we do for others if you'd like to discuss those with us.
We are not the best lender for every investor, or for every deal. Real estate investing is risky. Real estate is time consuming. We see people who give up after only trying one or two deals (when statistically most long term successful investors will look at dozens if not over 100 properties before finding a great deal)
Whether you determine we're the lender for you or not we wish you nothing but success in your investing!
- Merrillville, IN · Member since 2017 · 23 posts · 2 votes8y
I brought a deal to DHM. And they said they couldn't do it because there wasn't enough profit in the deal. They tell you to get house under contract then when you bring them a deal there like nope not enough profit. Then they want $3000 upfront me. So disappointed with them.
- Hard Money Lender · West Jordan, UT · Member since 2015 · 105 posts · 75 votes8y
Originally posted by @Antoine Brown:
I brought a deal to DHM. And they said they couldn't do it because there wasn't enough profit in the deal. They tell you to get house under contract then when you bring them a deal there like nope not enough profit. Then they want $3000 upfront me. So disappointed with them.
You do NOT need to enroll in order to get a deal funded through us. The deal you brought to us was not profitable enough for us to fund. That doesn't mean that the next one you submit would be rejected. We're going to look at each deal individually and determine funding from there. We don't give "preference" to those enrolled in our 100% Financing System.
- Merrillville, IN · Member since 2017 · 23 posts · 2 votes8y
@Jacque Fairbourn. You guys have my 3k for product I don't use. You going to reimburse me for it. Secondly I present the deal If you guys are making a $13k off my deal and my deal analyzer says minimum I'll make $10k profit how am I getting turned down.
- Hard Money Lender · West Jordan, UT · Member since 2015 · 105 posts · 75 votes8y
@Antoine Brown I've looked at the notes for the account I believe to be yours in our system, but I cannot be certain without connecting with you to confirm. If it is the correct account I see that you've only reviewed one deal with us this far and that when we went through the numbers with you it did not appear to be profitable enough to order evaluations to continue. We won't fund deals that are not profitable or are too risky. If you can connect with me here or contact our team for more assistence we'd love to help you.
- Real Estate Agent · Norfolk, VA · Member since 2016 · 12 posts · 1 vote8y
ARV: 150k
Purchase Price: 80k + 25k repair = 105k all in price *meeting the 70% ARV DoHardMoney requires
DoHardMoney Lending Rates and Fees:
- $3000 initial deposit for 100% financing if client is not satisfied with quality can call and ask for refund within 3 business dates "ensures the Client remains committed to moving forward until the Client's first profitable deal is funded and paid off"-Purchase Agreement Client signs
- 680 Credit Score Originating fee 5.5 points w/ 1.25% monthly interest rate
- 679 credit score & lower Originating fee 6.5 points w/ 1.5% monthly interest rate
**Mortgage points, also known as discount points, are fees paid directly to the lender at closing in exchange for a reduced interest rate. One point costs 1 percent of your mortgage amount (or $1,000 for every $100,000).
Breakdown:
NOTHING IS DUE UNTIL CLOSING.150 days after purchase the loan is due or 1% extension will be added. You can extend up to (3) times.
105k* 5.5points = $5775
105k*1.25%= $1312.50 $1312.50*5months= $6562.50
TOTAL=$12,337.50 Loan Holding Cost.
150k-105k= 45k Net income
Calculate Holding Cost. . . .
$45k-$12,337.50 =$32.6k -----------27% profit deduction
* does not include any other fees that may come up
- Norfolk, VA · Member since 2015 · 4 posts · 4 votes8y
Originally posted by @Jacque Fairbourn:
@Marc Noel - Hello!
While I know that you're hoping to hear from a DHM borrowers as well, I am going to take this opportunity to clarify our 100% Financing System. These things may have already been explained during your phone call, but I will take this opportunity to make things a bit more clear.
Yes, enrollment in our 100% Financing System is $3000. You DO NOT need to enroll in this program in order to obtain funding from us, but there are many benefits to joining.
- Access to 100% financing for any deals that qualify. (enrollment does NOT mean that we will fund any deal members bring to us. An unprofitable deal won't get funded, a property that doesn't stand much chance of selling during the term of the loan won't get funded etc.)
-DHM will fund up to 70% of the ARV. That 70% can include purchase, rehab and loan costs. Anything above the 70% is cash you'd need to bring to close. We fund many profitable deals where the borrower brings cash to close as well as providing 100% financing when appropriate. We don't cover other things like earnest money or any marketing costs incurred when finding a property (we're a lender, a rich, doting uncle :) )
-Those that do enroll have access to tools and resources that help them to not only find a good deal, but to find one that qualifies for our criteria. We DO occasionally turn away deal that eventually get picked up by other lenders because we need to be more careful, as we are taking on much more of the risk. We have data on the risk and profitability of enrollee deals vs. those we do for others if you'd like to discuss those with us.
We are not the best lender for every investor, or for every deal. Real estate investing is risky. Real estate is time consuming. We see people who give up after only trying one or two deals (when statistically most long term successful investors will look at dozens if not over 100 properties before finding a great deal)
Whether you determine we're the lender for you or not we wish you nothing but success in your investing!
- Coral, MI · Member since 2018 · 4 posts · 0 votes8y
Most of these posts are pretty old and the terms have seemed to changed from what I have read. Just wondering if anyone has done any deals with do Hard Money recently and if so how was your experience as a customer?
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