Any Legitimate Hard Money out there?

Question

I've been looking for Hard Money in Michigan. It's tough. LOT's of what appears to be a sketchy leads. Can anyone recommend a legit Lender that will finance a good deal? I'm new but I'm not inexperienced. I have 2 successful buy/renovate/rent/refinance under my belt using traditional financing. I have a great team and we are looking to move on another deal but I need the funds. I know I'm going to be paying 10+ percent for a short term before I refinance the loan. Any success stories with specific lenders in MI.

Jay Hinrichs · Answer

@Adam Klugh OK I have been a HML in my days .. and I did loan in Detroit in the early 2000s and got out before the melt down.that said. here is what I see on BP all the time.this OP who says 6 to 7 % money that TOTAL BS there is no 6 to 7% HML's BANK loans to a very established borrower who can show years of track record lots of money in their bank and I don't mean 20k . so forget thatthe company you talk about that wants 3k up front your BS meter is correct they make money on the 3k and you will play hell getting them to fund a deal for you they will just keep telling you the deal is not good enough until you finally quit asking .And all these guys that post on BP about loans form 5 k to 50 million rate starting at 3% fico 500 .. all of them are NOT REAL they just want up front money.. THERE IS no funding like that it does not exist for RE investors.. the ONLY 3 % money is for the very wealthy that put up their securities as collateral and then borrow at 1 over libor.. so you have 5 million in securities at one of the big houses and they will lend you 2.5 mil at 1 over libor 2 to 3% but that its.So here is what hard money is universally around the country so as @Aaron Mazzrillo suggests instead of scratching your head and thinking your going to find some unicorn HML.HML rates are 10 to 14% on rate and 2 to 4 points .. usually need at least 20 to 30% in cash into the deal.. one year terms.. etc etc.. once you establish yourself with these folks over time.. the cash needs can drop and rates drop a little.ON the west coast were we have a VERY stable RE market and TONS of money chasing deals.. you can get HML for 1 and 9 1 and 8 sometimes.. but that's it and that's Prime CA .. and it requires 20 to 30% cash into the deal.. the other thing you have a hard time with in some markets and much of the rust belt is your buying very inexpensive proeprteis and lenders don't want to make tiny loans.. they are not worth the time and the risk. So a 50k loan at 2 points makes them 1k in fee's that's a ton of risk for such a small loan and if it turtles you can lose half your money in that market no sweat.. that is the other major hurdle. so find a local HML go meet with them.. settle on their terms and get to work.. trying to find lenders on the internet that will do MI @Darren Eady states is very tough... bad rap that whole state because of what happened in Detroit.. Many folks lost many many million so dollars investing in that city .. so you get painted with that brush unfortunately.. so that's why you need your local HML like me with a little pot belly my big cigar and I take a liking to you.. that's how it works. :)

Account Closed · Answer

You can do better than hard money if you have investor experience.Several investor friendly lending outfits out there right now but you won't pay prime. It's usually in the mid 6% to high 7% range. I've been trying to find prime rate investor friendly lenders for 6 months with no luck. DM me and I'll send you a contact or two. Don't want to post their email addy in forum b/c spammers.

Adam Klugh · Answer

Jackson, MI is in the middle of the state south of Lansing. You seriously avoid ALL of Michigan because of Detroit?

Adam Klugh · Answer

@Michael Noto Well, don't of the places had bad reviews when I looked them up. The interest rate seemed too low tied to up front evaluation fees. One place wants 3k just to get started with a promise to refund after first deal. I'm just afraid I'm going to play my money just for them to tell me it isn't a good deal.

Michael Noto · Answer

@Adam Klugh what is sketchy about the HML leads you were given? Maybe what you think is sketchy is actually normal in the hard money lending space.

James Rey · Answer

Matt Castle we are up the street from you in Maryland for SFH and you mentioned some lender at 6/7 and one. Would you mind messaging me? I tried but did not see your contact info. BTW I saw you had an interest in multi family. My partner and I have been doing multi family up and down both coasts for a while now pretty successfully. If I can help you in any way please let me know.

Adam Klugh · Answer

Great point @Aaron Mazzrillo. And while there may be opportunity down that road, I have a team in place for the road I'm on. Just need that final very important peace - funding

Aaron Mazzrillo · Answer

Sounds like you discovered a need. Big question is do you keep scratching your head along with the rest, or do you figure out a way to fill the niche?

Cory Mccarthy · Answer

@Adam Klugh, you may want to try to reach out to @Tony Dixon. I have not closed a deal with him yet, but he has been very helpful, I just haven't been able to negotiate the right deal yet.

Darren Eady · Answer

It may not be the lenders you are having a hard time with. It may be Michigan in general. I worked with a company that has purchased 3000+ homes in Detroit (mainly) in the last three years and the market has been horrible for them. Unfortunately for the State of Michigan, the horror stories I've heard have kept lenders like me away from the state. I know you are probably not talking about Detroit and I know it is not fair, but I'm telling you the honest truth from my perspective.