Why am I having such a hard time with HM lenders? Unrealistic?

[Pat Mulligan]

I have a property under contract and have been working with a loan broker FOR OVER A MONTH! I'm in clear danger of the seller's patience running out. Was told we "passed" the lender's test: 730 Credit scores, plenty of $ for DP and reserves, years fo experience as RE Broker and PM, plus 2 rental properties and hx of BRRR. 2 weeks later, " the lender feels you do not have enough recent flip experience" and terms are up t 20% DP plus 4, not 2, points. Waited 3 weeks after ordering the appraisal for the ARV to come in 10K over as-is. WHAT?!? They want me to order a new appraisal before they would consider financing.

I contacted another lender to do a buy and hold (this is really a good deal for either a flip, or rental). The lender says he will do a "maybe" a 10% DP and rates 9-12% on a short term loan. No guarentees, of course, before another appraisal, and an application as extensive as Wells Fargo's. Property is under contract for $195K; CMA (not appraisal tho) is $325. I really hate to lose this deal.

I have never used hard money before and I feel so stupid here. My questions are:  

1) if CI and friends are so "excited to lend you money" why is it so hard to borrow with good credit +cash without the lender spending all of yours? 

2) is my loan broker experience ( dragging along, bait and switch) typical of working with a broker

3) Anything you would recommend that I could do in a hurry to save my deal? 

I would appreicate any help you could give me.  Thanks in advance

Pat

[Randy Thomason]

Hi Pat,

Sorry to hear your struggles but I hear this al the time from investors.  My words of wisdom(remember what the value of free is though, lol), is that you are fishing in the wrong pond. I know several Private lending companies out there across the country and a few are really good.  But most are leaving a bad taste in lots of mouths of investors.  too long to get funded, if ever, too many bait and switch as you have said, charging fees, etc.

Time to move to a different pond to fish.  Private lenders are the true way to go.  Build you network of PL's and you can get better rates, faster decisions (hours or a couple of days at most), no fees, no underwriting, no personal guarantees, close fast.  

Money is everywhere but it is camouflaged as every day working people.  tell everybody what you do and ask them if they know anybody who would like to earn 8-10% on their money flly secured by real estate for a short time.  They will all tell you no but the ones who have money will say- What about me?  I have some money.  It's funny how asking the question of who else has money brings the answers you want to ask, but if you ask the person directly they will almost always say they have no money.

If you join a REIA there are many people there who are private lenders but don't advertise themselves. They disguise themselves as investors and try to learn the doer's from the want to be's. Build relationships. This is what this business is all about. I usually pick up 100 to 200,000 in lenders every month or two and I am not out there searching often. But in this business you can never have enough money behind you, so never stop networking.

Happy hunting my friend!

Randy