Repair Escrow Question

[Augustine Cherukunnel]

Hi All,

I don't know if I've ever posted on here. I'm an investor who is in the middle of my first hard money loan purchase. I was hoping I could use this process to buy 2 properties, but at the rate things are going, this is going to take a lot more of my available cash than I had anticipated... Anyway, here's my question:

Do all hard money loans require a repair escrow? I bought a property well below appraised value ($88K/$145K), but it needs some repairs ($13-14K). I already paid $5k down as a deposit, so the amount of the total loan without financing fees etc should be about $97K. Assuming $5-$6k in financing I was under the impression the hard money loan would include funds for the repairs and I wouldn't have to come out of pocket too much as long as the price of the house and price of repairs doesn't exceed 75% of the market value of the home ($109K). Yet, for some reason, I had to bring a significant chunk of change to the closing for a repair escrow (holdback) $13,650. What I find most aggravating about this escrow is not only did I bring the money for the repairs to closing, but I had to pay a fee to make a draw from the escrow! I'm literally paying a fee to access my own money! 

I thought the whole point of hard money lending was to use other people's money for this sort of thing?