All Forum Posts by: Heath Clendenning

Disclosure - I am Director of PR for DoHardMoney

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.
• 9.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.  

I do not use hard money, however I know plenty of people who do.  

If I were you though I would use a hard money lender.  There is one huge benefit I feel to using hard money that does not get mentioned very often.  That is that the hard money lender is going to come out and review your project.  So you are getting another set of eyes from a very experienced investor on your project.  If they look at it and do not want to lend on the project it is a project you should be running away from.  If they do want to lend on it, you have a very good chance of making some nice money on the project.