Does anyone have experience with the lender DoHardMoney?

Question

Hey guys, I am considering to get involved in flipping and using DoHardMoney as the primary initial lender to get in.

They ask for a deposit of $3,000 upfront out of which they would take $650 for every evaluation they do for you on a house (inspection, appraisal)

The balance of that you would get back after they get their money back.

I guess what I'm worried about is giving them my money and them not responding. I've talked to a representative and he was informative in answering and addressing all my concerns. I do want a heads up from anyone that has used them and had great results or if anyone had anything that had gone wrong and I should be wary about.

They did give me a Title company nearby to look into that was involved with them on a transaction which I will call tomorrow to verify.

Any suggestions?

Thank you! Happy Holidays!

Andrew Michael · Answer

@Kanwar Sodhi I shot you a PM.  I am local to the area and have experience with almost every lender mentioned on this thread.  There are many local lenders in the DMV with the same/better terms as the national guys.  It sounds like your biggest reservation is a non-responsive lender who will run with your money.  If that is the case then vet some local lenders, go meet them in their office and get a feel for the company.

Jay Hinrichs · Answer

@Kanwar Sodhi  well that's nice to hear that DHM is being up front about how stringent they are on their underwriting..

Lenders require down payments ( other than DHM)

and the terms are 2 to 3 points these days.. and 10 to 12%  for new investors and can be as high as 14%

many won't touch someone doing their first deal.. first deal many times has to be friends and family to get it done. or you need more equity.

most will require at least 10% of actual cash regardless of LTV or ARV.

with 20% being more common.

and for very experienced flippers the bigger lenders are at 1 and 8 or there abouts.

bank loans that I get and these are full doc full tax return personal guarantee that mean something etc.. its 1 and 5.5 to 6.5 % that's the best you can do.

so go find that money partner.. then go shop

here are some that I know are for real and don't charge up front. other than appraisal..

1. lendinghome  ( they do charge 199 submission fee but they are FOR REAL) I have borrowed a few million from them.

2. Lima one   same thing they are for real I am closing a new construction with them on Friday in Charleston .. not greatest terms but pretty darn good for HML

3. lendingone  for real

4. visiio  for real out of Austin TX   they take out a lot of my loans IE my clients refi me out using them.

and I am sure there are plenty more east coast based that I am just not familiar with.

Ron J. · Answer

I would not advise anyone to go with DHM. Several people, including myself, were left hanging for 30+ days after the deal was allegedly submitted for underwriting and approved.

When I asked where the breakdown was, the response was “I don’t know”. I asked if they could dig deeper to find out. They totally ignored my request. The guy that I was working with just wanted to close out the ticket and know what happened to the house.

The customer service is super nice though. They are all cheery, but seemingly have no intention on closing your deals.  It’s like being molested by a teddy bear.  Don’t do it.

Brent Tomczak · Answer

Run as far away from these people as you can.  Had an absolutely horrible experience with them.  They stall every step of the way, yet claim they can close in 14 days. Maybe if you bring them a 200K spread, unicorn deal that you fleeced from some grandma.  They false advertise other deals that people went to them with. Claim that they're 100% funded, then mention at the end that it's 20k cash to close.  I am 100% confident  that they DELIBERATELY sabotage the evaluation process ON PURPOSE.  When I brought them a profitable deal, they brought in supposedly 3 independent real estate agent elevators who provide comps, and what they believe the property could sell for.   These 3 real estate agents did not come up w/ a single comp that was the same house. Literally impossible, considering the best comps were 3 and 10 houses down, which sold very high.. But because some homes a mile away, sold for less, and didn't have near the same quality rehabs that the close ones did, they decided they had to drop the ARV 20k, and keep me out of a near 100% funded deal. Total sabotage.They'll play nice with you on the phone, and pretend to have your best interest in mind, but they're completely full of it.  Also their origination fees are outrageous.

RUN!!

Debbie Farrell · Answer

We could help, we never require our clients to pay for anything but appraisals up front, i would love to discuss more in detail with you .

Conor Reilly · Answer

I highly recommend you reach out to @Andrew Michael He has helped out a few of my buddies in walking them through deals step by step by being very transparent and responsive.  Andrew is knowledgeable of the local area and actually lends and wholesale deals as well

Brent Tomczak · Answer

I was a bit harsh with my post, but I did file a complaint with the BBB, and was refunded my money. We just had a difference of opinion regarding the ARV of the property, and was not happy with the evaluation timeframe, because it almost cost me my earnest money.  I do think they fund deals, but you're better off finding them yourself rather than buying wholesale to minimize cash to close.  The partnership just wasn't for me, but we ended on good terms now.

Jay Hinrichs · Answer

@Debbie Farrell  Do hard money niche is the 100% financing of purchase and rehab..

So from what I have gleaned on BP and in my expeirnce in the space.

they will attract the new investor who is generally wanting desperately to break into the game but is limited on cash other wise they would go to any number of HML that have far better rates and terms than what I have seen talked about on BP about this company. Not to mention most only charge for apprasials.

the issues others have brought up is the 3,000 is non refundable if you never bring them a deal that meets THEIR underwriting criteria.. and of course simple logic would dictate that since its a new investor generally speaking  they are going to have the hardest time finding smoking deals which at the end of the day if I was DHM I would do the exact same thing.. except I would not be charging for turn downs like they do..

there are have been others on BP that paid the 3k PLUS 650 a submission only to have 2 or 3 turned down and never did get funded and now they are out 4 to 5k.. then others who have lost EM.

But there have been some on BP that said they got funded but then whinned about the draw process.

IE DHM ( according to them) required the borrower to front draw money and DHM would reimburse.. this caused all sorts of problems for the no money down flipper.. as you know they are on a tight budget.

then lastly the rates were not clearly described and from what I could glean these guys were 4 to 6 points and 15 to 18% interest and in the flipping world you know who is going to make money on those deals and its generally not the borrower.. LOL..

now I am sure there are some that have worked and these guys must fund enough to not get shut down.

But in principal getting 3k out of people and they cant get a deal done that is what gives most experienced folks in the industry pause.