Hard money lenders review

31 Replies

Hey guys, could you please help out and tell me what hard money lenders you used and who you liked/or did not like?

For instance, here are few that Ive been recommended. But before I use them I would like to see if somebody used them and can share their opinion...

1) Renovo

2) Lima

3) Do hard money

4) HML

5) Joint Venture Capital (JVC) found it on Bigger Pockets so probably somebody used them...

6) Whoever else you used that is not listed here, can you please share?

Please help!

@Mary Jay I just used Finance of America for a refi, not hard money, but I would recommend them. I got a decent refi rate and a 30 year note. I'll definitely look into using their LOC program for my next property. For my first hard money lender I used Groundfloor out of Atlanta. They had their pros and cons but overall it was a pretty good experience.
Originally posted by @Jason D. :
@Mary Jay I just used Finance of America for a refi, not hard money, but I would recommend them. I got a decent refi rate and a 30 year note. I'll definitely look into using their LOC program for my next property. For my first hard money lender I used Groundfloor out of Atlanta. They had their pros and cons but overall it was a pretty good experience.

 Thank you so much for sharing with us! I hope other people will share their experience as well...

Jason, do you mind sharing with us if they  (Finance of America) have any fees that you had to pay upfront? Also, do they loan 70% or 80%? Just in general if you could please share that would be good! (you dont have to tell your details if you dont want to, may be just in general what kind of deals they do?)

By the way, I called few days ago today but they said interest rate is 11% plus they want 20% down... I am trying to find something with less down and less interest

@Mary Jay the only upfront fee was an application fee and then I paid for an appraisal. Nothing else before closing. They will refinance up to 75% ARV, as long as the DSCR stays above 1.2.
Originally posted by @Jason D. :
@Mary Jay the only upfront fee was an application fee and then I paid for an appraisal. Nothing else before closing. They will refinance up to 75% ARV, as long as the DSCR stays above 1.2.

 Thank u so much!

@Mary Jay

Lima is great. They closed the deal on the front end right around 12 days. Professional and very prompt in communication. 2-3 day draw disbursement turnarounds from the time you submit for an inspection. Honest people.  Very-friendly, from their starting terms to their customer service.  They also have a solid tier system where the rates go down with progressive completed flips. Highly recommend them if needing a good starting point. 

I've used 20+ HMLs and talked to 100+ of them over the past 3 years.  I'm very familiar with most of the ones mentioned in this thread.  If you're trying to find the perfect lender, they don't exist.  It depends on what you're looking for, whether it's lower rates, longer length of the loan, lower down payment, faster closing, ease of transaction, flexibility of the lender with wholesale fees and junior lienholders (if you're funding with private money), etc.

Keep in mind that lenders also change over time, just like contractors.  So if someone tells you what their experience with a lender has been, ask how recent that experience was.  LendingHome has gone through some reorgs, Lima One bought out RealtyShares' single family flip business, Groundfloor changed some of their capital financing structure a couple of years ago, etc.  And generally, their terms change at least once a year.

Feel free to read the BP blog I wrote about comparing HMLs, but I think you first need to assess your own situation and rank what's most important for you in a lender.

@Mary Jay

You mentioned looking for lower interest and lower down payment.  Typically, that's an inverse relationship.  If you don't have much experience in your belt, you also don't have much negotiating power and usually pay higher rates.  For newer investors, I've found Lima One to be the best bang for the buck among the national lenders.  Just be mindful that although they advertise 10% down, they also require some additional capital in reserves, so you need to show around 20% to qualify.  Also check the regional lenders, as they may have a product that isn't tiered on experience (which is what most national lenders base their pricing on) and could be better.

Originally posted by @Tae C. :

@Mary Jay

Lima is great. They closed the deal on the front end right around 12 days. Professional and very prompt in communication. 2-3 day draw disbursement turnarounds from the time you submit for an inspection. Honest people.  Very-friendly, from their starting terms to their customer service.  They also have a solid tier system where the rates go down with progressive completed flips. Highly recommend them if needing a good starting point. 

Thank you so much!

How much did the loan cost you? How do their fees work?

Thank you

Originally posted by @Nghi Le :

I've used 20+ HMLs and talked to 100+ of them over the past 3 years.  I'm very familiar with most of the ones mentioned in this thread.  If you're trying to find the perfect lender, they don't exist.  It depends on what you're looking for, whether it's lower rates, longer length of the loan, lower down payment, faster closing, ease of transaction, flexibility of the lender with wholesale fees and junior lienholders (if you're funding with private money), etc.

Keep in mind that lenders also change over time, just like contractors.  So if someone tells you what their experience with a lender has been, ask how recent that experience was.  LendingHome has gone through some reorgs, Lima One bought out RealtyShares' single family flip business, Groundfloor changed some of their capital financing structure a couple of years ago, etc.  And generally, their terms change at least once a year.

Feel free to read the BP blog I wrote about comparing HMLs, but I think you first need to assess your own situation and rank what's most important for you in a lender.

@Mary Jay

You mentioned looking for lower interest and lower down payment.  Typically, that's an inverse relationship.  If you don't have much experience in your belt, you also don't have much negotiating power and usually pay higher rates.  For newer investors, I've found Lima One to be the best bang for the buck among the national lenders.  Just be mindful that although they advertise 10% down, they also require some additional capital in reserves, so you need to show around 20% to qualify.  Also check the regional lenders, as they may have a product that isn't tiered on experience (which is what most national lenders base their pricing on) and could be better.

Wow! That is so impressive! I cant believe you have used 20+ HML! That is so impressive!

What is the name of that BP blog that you wrote? I am very interested in reading it...Do you have a link? Or  a name

@Mary Jay

I don't know if BP will allow me to link it, but you can find by going to my BP Profile and scrolling down on the right-hand side under "Authored Blog Posts".

@Mary Jay

12% and 3.5 pts.  90% LTC (purchase price plus rehab costs) was financed.    Finish two flips, and you’ll get 11% and 3 pts.  And three more tiers after that.  My draw inspections were $150, but I believe they are $200 now, but will want to verify that.  All their info is right on their website if you want to know more.

Originally posted by @Tae C. :

@Mary Jay

12% and 3.5 pts.  90% LTC (purchase price plus rehab costs) was financed.    Finish two flips, and you’ll get 11% and 3 pts.  And three more tiers after that.  My draw inspections were $150, but I believe they are $200 now, but will want to verify that.  All their info is right on their website if you want to know more.

 Lets say after you remodeled it u want to keep it, you can refinance with standard lender, but what if there is no 20% in equity? Then what?

Originally posted by @Nghi Le :

@Mary Jay

I don't know if BP will allow me to link it, but you can find by going to my BP Profile and scrolling down on the right-hand side under "Authored Blog Posts".

 I found i! Great post! Thank you!

@Mary Jay A lot of the questions you are asking in regards to numbers are on all those lenders' websites. I appreciate this post though. Answered some questions for me as well. Curious if anyone else can recommend any other HMLs they have had good, recent success with?
Originally posted by @Mary Jay :
Originally posted by @Tae C.:

@Mary Jay

12% and 3.5 pts.  90% LTC (purchase price plus rehab costs) was financed.    Finish two flips, and you’ll get 11% and 3 pts.  And three more tiers after that.  My draw inspections were $150, but I believe they are $200 now, but will want to verify that.  All their info is right on their website if you want to know more.

 Lets say after you remodeled it u want to keep it, you can refinance with standard lender, but what if there is no 20% in equity? Then what?

to give you an example of why experience and financial statement affect rates.. I have one construction loan with Lima  1.5 and 8% .  

Genesis is also competitive but full underwriting.. 

Originally posted by @Brian H. :
@Mary Jay A lot of the questions you are asking in regards to numbers are on all those lenders' websites. I appreciate this post though. Answered some questions for me as well.

Curious if anyone else can recommend any other HMLs they have had good, recent success with?

 lending home

lending one

Seems that all HML lend for flips and constructions...

Anybody tried to do buy and hold with hard money? My understanding, some hard money lenders charge only 1% higher than regular banks... 

Originally posted by @Mary Jay :

Seems that all HML lend for flips and constructions...

Anybody tried to do buy and hold with hard money? My understanding, some hard money lenders charge only 1% higher than regular banks...

There are hard money lenders out there who also have long-term rental programs as well. Lima One and LendingOne are two big players in that space. But they'll charge you a couple of points on top of that rate and have prepayment penalties.

I usually prefer commercial loans though (from a bank). Sometimes they can be cheaper than conventional loans, but underwriting is easier. Based on cashflow and DSCR instead of DTI.

Originally posted by @Nghi Le :
Originally posted by @Mary Jay:

Seems that all HML lend for flips and constructions...

Anybody tried to do buy and hold with hard money? My understanding, some hard money lenders charge only 1% higher than regular banks...

There are hard money lenders out there who also have long-term rental programs as well. Lima One and LendingOne are two big players in that space. But they'll charge you a couple of points on top of that rate and have prepayment penalties.

I usually prefer commercial loans though (from a bank). Sometimes they can be cheaper than conventional loans, but underwriting is easier. Based on cashflow and DSCR instead of DTI.

 Thank you. But with commercials loans there is more headache, you have to recertify them every 5 years or so, show income ...Right?