do hard money

60 Replies

Has anyone had any dealings with DoHardMoney, positive or negative? 

I'm talking to them now. They seem expensive, but willing to lend when others won't. They are pretty specific of what properties they'll work with. She said she'd give me a proof of funds letter, but she will have 2 inspections done. As long as the property meets their criteria they will fund you. She said it was up to us to be as honest and realistic as possible when evaluating the property. Basically if it's a good enough deal they will lend us the money; they just won't take our word for it if that makes any sense.

Do Hard Money typically brokers the loan to a hard money lender in your area and scrapes some points off the top. Almost always best to find a local HML in your area. If you can't find a local lender it might be a decent play, but you probably aren't looking hard enough.

@Eric Tinsley

  up to the borrower to be honest and realistic... that's not usual lender speak  :)

Ya, you'd think so, but I've read a lot of reviews on them. Most of the negative ones come down to the borrower thinking they found the perfect deal; then DHM saying they can't finance it because the inspectors did agreed.

@Eric Tinsley

  this is why @Travis Sperr

advice is spot on a local HML is who one should use.. they know the market the best.

plus

1. they will keep you from buying a dud n ( because they won't lend on it)

2. you build relationships with a local.. not some internet company

3. the will keep you from buying a dud  I might have repeated myself here but it can't be understated..

I can tell you I have saved many a would be borrower heart ache by refusing a deal and then politely pointing out why its not a deal.  And If I did the deal I would be the only one making any money.. I have done that more times than I can count as well. flipper thinks they got a good one we require more equity because they really want it... they were wrong we were right we made all our interest flipper makes nothing or loses money and is one and done.

Network, Network, Network. 

Biggerpockets, local Reia's, see how other investors are getting deals done, search the interwebs. There are a lot of events and lenders in your area - in and around the belt way. 

I'm working with DoHardMoney right now. So far my experience is pretty good. I found my property in an area where they approve a lot of homes. 

Disclosure: Executive Team

@Travis Sperr

I want to be clear here.  We do not broker loans.  We are a direct lender.  

Disclosure: Executive Team

@Eric Tinsley @Jay Hinrichs

Let me clarify the context of "up to the borrower to be honest and realistic"  When a customer calls in with a property under contract we run the deal through our Advanced Deal Analysis Software which gives a comprehensive breakdown of the projected costs and profit among other things.  The output is based on the numbers the borrower is providing us.  If the numbers look good we recommend sending out 2-3 Independent local experts to evaluate the property including pulling 3 Active and 3 Sold comps and an overall market analysis in addition to a breakdown on the scope of work.  

We're telling the customer that they need to be sure they're being realistic with themselves on the opportunity before they pay for the cost of sending evaluators out to the property.  There's a tendency particularly with new investors to want to look at the opportunity from a best case scenario which immediately puts them in a high risk position.  We're trying to make sure the borrowers have done accurate leg work upfront before they commit resources to a deal.  I'm not sure what Jay's implying in regards to this not being "usual lender speak".  It's absolutely what I would want a lender to do for me.  Make sure I'm being honest with myself on the numbers so that I'm not losing money.    

To Jay's point, we're keeping people from buying a dud.  Sometimes that can be hard to swallow when a customers got their hopes up on a deal and then our 2-3 independent local evaluators put the After Repair Value at a lower amount than what the customer was expecting.

We recognize the value of local knowledge and that's exactly why we leverage the expertise of at least 2 independent individuals from the area to help us establish values.

Again, just like Jay we've saved many a new investor from getting into a bad deal.  

Wow, I kind of forgot about this thread. When i first started working with them I really believed they would be my foot in the door to REI. I told everyone how great they were, but then I got to know them. Now I wouldn't really call them a scam, they may very well work for a handful of people here and there, but here's how it went down for me.

     I found a great property, I would have made 75-100k on the low side. I put all the info into their website. It says something like congratulations you're qualified for 100% financing. I call them up and they say that I am qualified, I just need to give them a $2000.00 deposit that I'll get back later. Well I don't have $2000.00, but I know how good of a deal I found so I go sell some stuff, pawn my wifes ring, and call them back. Well now I forgot I have a $500.00 daily limit on my card, but fortunately they're willing to work with me. So I pay them $500.00 a day for four days. On that last day; which is about a week and a half after I first gave them the info on the property I found.... The one they were like "yay, you're approved for 100% financing".... The second they got my last payment she said "Thank You, and by the way DHM (can't remember the name) said to let you know we can't help you with that property because it's in a rural area" I did look around to try and find a property that was both profitable and would meet their criteria, but in our city they don't really exist. They don't have any understanding of your local market, so they really can't help you unless you happen to live in an area with an identical market as theirs. Basically they said if I wanted to work with them I could only buy the houses no one wants??? So of course I asked for my money back like they promised, but I was told I could only get it back if I financed a house with them. So to make a long story short, DHM might be able to help you, or they might make you miss out on $100,000 deal and leave you penniless with your wife's diamonds in pawn. So if your a gambler or you can afford to lose a couple grand then dohardmoney.com is the site for you. Me I've learned my lesson, and am working with a local reputable lender.

          

Originally posted by @Eric Tinsley :

Wow, I kind of forgot about this thread. When i first started working with them I really believed they would be my foot in the door to REI. I told everyone how great they were, but then I got to know them. Now I wouldn't really call them a scam, they may very well work for a handful of people here and there, but here's how it went down for me.

Did they return your deposit?

Originally posted by @Ralph R. :

Did they return your deposit?

No, of course not. It's just a $2000 lesson learned. Hopefully by posting here someone else can learn from my mistake for free.

Is it just me or is always a bad sign when the lender asks for money before closing.  I might give them money for an appraisal or perhaps an inspection by a licensed person.  Other than that, they are not going to get money from me before closing.

I forgot one thing.  If they ask for money, ask what percentage of people pay them a fee and then do not close on a property with them being the lender.

Of course, ask for them to put that number in writing.

I'm a real estate agent in NC. I've had about 5 deals with DoHardMoney.com. You do have to jump through some hoops, but they are lending the money, they have to make sure they are covered. I've enjoyed working with them and have learned so much! To the naysayers, just because 1 deal didn't work out, try again, and make sure your agent knows how to make the deal work too..If you feel like your deal may go south, send me an email..we've gone through it all! :) and I still enjoy working with them.

~Mitzie Phillips

Louis Presley

Mustang Lending LLC

Fort Worth TX

I got a call three days ago from an investor that had been in contact with DoHardMoney. They had already paid $600.00 up front and had been "approved". Now, they were just waiting for two reps to evaluate the property. I was taken back when they told me how much money in fees and interest they would be paying. They said DoHardMoney would finance almost 100% of their deal and roll the 1st five months of payments into the loan. They said they would only be out about $2700.00 dollars at closing. This was attractive to them because they didn't have very much money for a down payment or to pay monthly interest on a loan. At first, taking the numbers at face value, the property sounded like a genuine good deal. But, I know the area and after getting a few more details about the property I had serious doubts that the property was going to meet their lofty ARV expectations. Furthermore, after getting more detail about their planned scope of work it was apparent that it could not be rehabbed for any were close to the amount they planned on spending. I have spent so much time explaining to new investors why their deal is not a deal. Often times they have just plunked down thousands ($27,000.00 in one case) of dollars at some seminar. I always require the investor to have some skin in the game 5 to 10 percent of the purchase price. If they don't have any money then they are not going to be able to service the interest only monthly payments on the loan. Some time an investor will get a good deal under contract but I still can't make them a loan either because they have no cash reserves for a down payment and or they can't or won't be able to make the monthly interest payments. Or, they have really bad credit, like they are late on everything and or have too many accounts in collection are in bankruptcy or have outstanding federal tax liens or judgments. However, all is not lost. If an investor has found a really good deal but can't get financed for some reason then there are options. First, if it's truly is a good deal then the investor should have no problem finding a partner with some money to joint venture with, get a hard money loan (HML) and split the profit. Another option is to simply wholesale the deal and assign the contract to another rehabber and make a quick easy risk free few thousand dollars. Remember, if it really is a good deal then there should be enough margin and you won't have any problem assigning the contract and making a few thousand bucks yourself. Don't get greedy leave enough profit in the deal for the rehabber. And finally, the hard money lender (HML) may do a joint venture with you if he can't make you a loan for one reason or another. An investor should not have to pay any upfront fees to the lender. If after talking to the investor about the deal and I am convinced it sounds like they can make money I will have them contact my licensed appraiser directly for a "subject to" appraisal. That means subject to the planned scope of work. They will have to pay the appraiser upfront for the appraisal. Most hard money lenders base their loans on after repair value (ARV). I will loan up to about 70% of ARV. If the appraisal comes back lower than what the investor anticipated then their out of pocket may increase. If the appraisal comes back to low then it's game over. I won't make a loan if it doesn't look like the investor is going to make a profit. At that point the investor will have spent $450.00 for the appraisal and that's all. If the appraisal comes back favorable then were off two the races. Closing is schedule and a title commitment is issued, loan docs are drafted and the transaction is closed. Most of my borrowers are repeat clients and they value my input and I can't tell you how many times I have told them to walk away. I can't tell you if DoHardMoney is a good deal or not. I suppose in some circumstances were no other lender is willing to lend then it could makes sense.

Louis Presley

Mustang Lending LLC,

Fort Worth TX

Originally posted by @Eric Tinsley :
Originally posted by @Ralph B.:

Did they return your deposit?

No, of course not. It's just a $2000 lesson learned. Hopefully by posting here someone else can learn from my mistake for free.

Upfront fees without a firm approval for your loan sounds... odd. The only fee we charge upfront is the appraisal to confirm value/the investment. Because we are local we run our own comps to confirm ARV to ensure your nor our time is wasted on an unrealistic opportunity. Our analysis is wrapped up in an hour or less without upfront fees nor "oddness".

It's been recommended and I'm going to echo the comment - use a local lender (HML, priviate) because they will partner with you on the loan and may have valuable insight about the local market that a nationwide group wouldn't know. IE: I've closed a number of deals in the area and have the "inside scoop".

Taking $2000, and then saying the property doesn't qualify is just plain immoral and unethical. An upfront fee is not always bad, but that's ridiculous; It's a perfect example of why everyone says don't pay upfront fees. Our company charges a small fee to cover some upfront costs, but only after we verify the property qualifies, the numbers work, and the borrower is eligible. Then it's just a matter of verifying everything, and getting documents done.

Personally, I have not done any business with them, and I won't. 

I spoke with them twice in late 2015. They deliberately misrepresented their interest rates on the phone to me. "You'll only pay 5-6% in interest" They left out the part where that was for a 4 or 5 month loan. I had to ask multiple times to get them to admit the annualized rate was around 18%.

Their points and fees were also very high compared to other options.

They claim to fund 100%, and they might. But you'd better have a killer good deal to cover all the extra costs. If the deal is good enough to pay the extra fees, you may be better off wholesaling it, and using that money as a downpayment on the next deal.

Originally posted by @Cooki Karriem :

@Travis Sperr thanks again.

Did anyone ever complete a transaction with DoHardMoney? I am in the process now but am having some second thoughts based on reviews. I have searched for some time for local HML but a couple of them didn't even call/email back??My situation is i don't have very much $ to put up and thus there terms seem the most intriguing.

Originally posted by @Eric Tinsley :

I'm talking to them now. They seem expensive, but willing to lend when others won't. They are pretty specific of what properties they'll work with. She said she'd give me a proof of funds letter, but she will have 2 inspections done. As long as the property meets their criteria they will fund you. She said it was up to us to be as honest and realistic as possible when evaluating the property. Basically if it's a good enough deal they will lend us the money; they just won't take our word for it if that makes any sense.

 Was your dealing with Do hard money successful?

Originally posted by @Eric Tinsley :

I'm talking to them now. They seem expensive, but willing to lend when others won't. They are pretty specific of what properties they'll work with. She said she'd give me a proof of funds letter, but she will have 2 inspections done. As long as the property meets their criteria they will fund you. She said it was up to us to be as honest and realistic as possible when evaluating the property. Basically if it's a good enough deal they will lend us the money; they just won't take our word for it if that makes any sense.

 My apologies Eric i just saw your post of the outcome after i sent you the question. 

@Christian Sifuentes search for a local lender, try contacting the ones who didn't get back to you. It is important especially on your first few deals to work with someone local that knows the areas you are investing in. 

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