hard money lenders

[Cleon Williamson]

anyone have any experience with investment property loan exchange

[Mike Klarman]

I never heard of them.  So you need to remember that there are about 4- 6 big box lenders that fund most of the Hard Money loans and then you have thousands of brokers selling their products and lots of times someone thinks they are dealing with a lender but they are not, they are dealing with a broker who has a lending sounding name and this broker is set up with an account at a few different lenders.  Brokers are allowed to charge you what they want and if they can getaway with charging 3 points they will, especially of the loan amount is like 400k.  They can also make yield spread.  They can have a 10.99% available to them but sell it to you at 11.99%. They make that 1% ysp.

Brokers are like anything else.  A good one is more than worth the standard 1 point if they hustle, are responsive, are reachable, and really look out for you the client and try to get you the best out there for you and then the bad ones are not only not worth the 1 point but they charge double or triple.

And websites and reviews can be misleading.  The first thing a scam artist will do is build a fancy looking website and pay for some reviews.  They know what people generally look for when vetting a lender.  

The truth of it is, lenders can be really, really difficult to work with.  It's all done by email, you'll never talk to your rep or processor by phone and if your loan officer or processor is bad at they're job getting a loan closed can be a nightmare.  I mean a nightmare.  I been in those 60 day closes because the team on my loan sucks.  The loan officer, the loan process, and the closer all suck.  Now, someone else may have a great team and they close in 4 weeks and they say oh my Lender ABC is great, and I'll say lender ABC is God awful.  Having a broker makes that broker deal with the lender headaches, non responsiveness, ridiculous conditions, all the docs, and pushing it across the finish line within 4 weeks.

There's lots, and I mean lots of turnover in the industry.  Processors and loan officers come and go from these lenders all the day is long.  Teams change, personnel changes.  I can't tell you how many times I had to do the processors job for a lender just so my clients loan got closed on time.  I've done title's job, insurance.  There's so many links in the chain that can fail in that 30 days between when you get an executed contract and when you officially close.  A good broker will make sure the chain links stay together and strengthen any weak spots along the way, a bad broker will look for someone else to QB the thing and wait on their check.

Nightmare closings do happen and they happen everywhere because it can be a title issue, it can be insurance, it can be a terrible team from the lender, your broker can be bad, and all of the above.  That's why I always advise people to start small.