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Updated almost 4 years ago, 02/21/2021
Direct Lending Partner (any reviews?)
Has anyone dealt with Direct Lending Partner? Talked to them today about their program. They offer lines of credit so you can move quickly and have a less detailed process to get funds each deal. They do have some setup fees to open the line of credit but, once that is done, the origination fees and interest are good compared to other hard money sources I have seen.
Any feedback on them?
Most that offer line of credit for fix and flips don't ask for fees upfront unless for appraisals or application. Applications fees most likely should be no more than $500.
What were they offering? Just curious.
500k line of credit. 1% origination fee to set up the line. Then 2 points when you draw for the loan. Up to 90% LTV or 70% ARV. Between 8.49% and 13% interest depending on how much you put down on each deal (Affecting the up front LTV).
I like having the line of credit so I can make offers quickly. Would like to hear better options if anyone has had experience with one.
TIA!
1% fee of what? $500,000? Are there any other fees upfront? There are better sources in the industry that off no fees upfront and up to 90% ltv or 75% Arv. Rates between 7% to 10%.
I guess I need to keep looking then.
Yes, the origination fee is for the line of credit so if you got a 500k line you pay $5,000 up front to establish it.
I'm going to go through the list here on BP and talk to some of those lenders. Thanks for the feedback.
#4 All Forums Contributor
- Lender
- Lake Oswego OR Summerlin, NV
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#4 All Forums Contributor
- Lender
- Lake Oswego OR Summerlin, NV
I would think even though you have a line of credit unless its a TRUE unsecured LOC like I have with my bank... you still need to do appraisal and underwriting to get the deal funded.. so I don't see the advantage of paying 5k just for the privlage to then submit a loan request then pay another 2 points.. Not that I have alternatives for you other than the normal guys out there like
Lendingone
Lima one
Lendinghome
Visio
etc..
- Jay Hinrichs
- Podcast Guest on Show #222
@Toby Beavers You have me nervous. I have a contract with them now. I'm awaiting the appraisal & inspection.....I'll send you a message.
#4 All Forums Contributor
- Lender
- Lake Oswego OR Summerlin, NV
- 61,783
- Votes |
- 41,968
- Posts
#4 All Forums Contributor
- Lender
- Lake Oswego OR Summerlin, NV
@Account Closed yup sounds like a pump and dump due diligence outfit.. from what your saying..
any fee up front and a quick approval when they have not really done any due diligence is simply a ploy to get the 995 form you and chances are they don't make many loans at all.. maybe enough to keep from getting in hot water but I suspect their main income driver is the 995.00
500k unsecured LOC is a pipe dream for most people.. you would need to have a big balance sheet long track record history of making 500 to 1mil adjusted gross a year that type of thing.. even then VERY tough and the only one's that make those are commercial banks.. NO private lender does them
the other people posting are simply going to run out and get you in massive credit card debt :) which may or may not work for some.. its financial suicide for others though.
- Jay Hinrichs
- Podcast Guest on Show #222
Yikes....well I have already paid the $995 and am currently awaiting inspection and Appraisal. Any advice on how to handle with a deal on the table?
Update: I wanted to give them the benefit of the doubt before posting anything negative. I know hard money lenders are going to charge extra fees, that's what they are in business for. However, I must admit that I do not believe that Direct Lending Partners is in the business to actually do loans.
I paid the requested $995 upfront fee which I was told is for the inspection and Appraisal. After submitting all of the standard required documents I was told I was approved for a $500k line of credit. After hearing the bad reviews online I decided to back out and told my loan specialist why. He offered to connect me with some references. I spoke with the references and two seemed to be on the up and up, the third never responded to my call. One reference I chatted with for about 30 minutes. I chalked up the bad reviews to being circumstantial and decided to proceed.
Once I secured the contract on the house, and submitted the scope of work. They ordered the appraisal and inspection. I cannot confirm that these have actually been done. I was told the appraisal came back for the exact purchase price of the duplex, the ARV for the purchase price plus the exact amount quoted by the contractor on the scope of work. Which I found interesting because I purchased the home for almost $15k less than what the county tax assessor has is appraised at and it's in an up and coming area.
When I asked to see the formal appraisal and inspection reports that is when communication got scarce. I called multiple times and sent multiple emails requesting the reports and received no response and the voicemail box was now full. So I decided to call the actual company, the receptionist was pleasant and told me the loan specialist was at work and that she would send him an instant message for him to call me as soon as possible. He responded the next morning by email apologizing saying that he was traveling and would call me first thing. I responded asking him to send me the reports so that when he calls we can have an informed conversation. Now I have not heard back from him.
I am okay because I went into this with an alternate finance option. I am now proceeding with my plan b and expect to still close on time. I also used a credit card for the upfront expense so I shouldn't have an issue getting my money back.
All I can say is proceed with caution. There may be some that have had success with this company but that is not my story. If you have had a successful experience with Direct Lending Partners, please share. Right now there are only many bad reviews for this company.
Hi Maria Flowers,
We're you able to close the deal with Direct lending Partner?
@JohnnyGalvan
Nope.
@Maria Flowers Thanks so much for the info! You just saved me some time and money. I was planning to talk to them tomorrow about a loan.
I’d work on building quality substantial relationships with people looking for alternative investment opportunities!
They can move quickly & you can pay them more than they’d get in a traditional investment vehicles & it’d cost less than hard $!
Win-Win!
I have brought two deals to Direct Lending Partners and have not only not closed one, but have had very poor and professional customer service from Craig Yarnell.
First one I paid for the appraisal and despite both my comps as well as my realtor doing a full market analysis, they appraised the property at what was paid for (20% below market comparables) but also appraised the ARV at 50% of market comparables. When I was strong along until 5 days before closing (not allowing me sufficient time to put plan B in place (my lesson learned!).
Second deal, I spoke with Craig prior to bidding on a house bring offered by HUD. I was assured there would be no issues, they have funded these loans many times. Craig couldn't get a lender's letter over that would satisfy HUD and refused to answer my or my realtors phone calls or emails.
I was also told I was approved for a $500,000 line of credit, with a 1% fee for set up. But the whole appeal to that line was that they would find quickly and for small properties (under $75k). When I called about the 2nd deal, a "new policy" went into effect that nothing less than $75k ARV will be considered for funding.
It appears they make their money making promises and charging outrageous fees upfront without ever closing a loan. If anyone has actually closed a loan with them, I would be interested in hearing about it!
Thanks for updating the group about the practices of Direct Lending Partners! I too am curious to know if anyone has ever closed a deal with them.
What did you ultimately do for financing? I am a newbie investor trying to secure funds for my first deal and looking for a reputable HML, any suggestions?
Thanks!
I lost out on that first deal. I went the conventional route for other deals.
@Maria Flowers when you say conventional? Do you mean through a bank with a FHA or conventional mortgage? How did that work? I thought you had to reside in the property to do a conventional mortgage and the loan wouldn't include the renovation costs? Sorry for all the questions :)
Jenni
@jenni rivera I ended up getting a partner who obtained personal loans for the amount of the project. Reno is almost done and I expect to get a HELOC to pay off the loans once completed.
I just reached out to them today for some initial information, then did a quick Due Diligence google and came across this thread. Has anyone identified any LOC companies that they do deem as trustworthy? Short of establishing a relationship with someone looking for investment opportunities, what are the companies you like for quick closes. I am a home investor that averages 2-3 flips a year. Until now though, I have always used my own funds, but we look to scale to 4-5 properties. So I am just starting to explore private funding and hard money options. Need quick closes usually. My apologies if this is posted somewhere already. New to the site. Going to go explore it now. Thanks!
"Beware" is all that I can say about Direct Lending Partners. I contacted DLP about funding a multifamily unit that I paid cash for. I am doing a MAJOR rehab of the property and I contacted DLP to see if one of their loans would work. I was informed of the appraisal/inspection fees, the Loan Origination Fees, the loan terms (interest rate, months, etc). I asked about additional/hidden fees because their advertisement said "No Hidden Fees". I decided to fill out the loan application and after sending in all of my personal info I was told that I was approved for a 500K Line of Credit. Fast forward a few weeks when I receive the HUD-1 statement from my title company and I see a total of $8,395 in ADDITIONAL FEES broken down as follows:
Commitment Fee = $895
Line of Credit Fee = $5,000
Legal Fee = $2,500
Interest to first payment (normal I guess so I don't consider this as a hidden fee) = $1,214.31
On top of that, I was initially told that the Appraisal fee was $595, then I received a email stating that an error was made and since my unit was a triplex, the fee was $695. Well on the same HUD-1 statement, there is an additional $105 fee for an appraisal, bringing the appraisal to $800. So my $164,900 rehab loan is now costing me $180,201.45 (actual numbers from the HUD-1). Needless to say I am looking for another lender. Fortunately I am not in a crunch to get the rehab started since I paid cash for the property and I have time to search for other lenders (any suggestions???)
My advice to anyone is to ASK for the lender's Pricing Summary Sheet so that you are aware of ALL of their fees. I am not a newbie to investing and I still make my rookie mistakes, but i know there are better lenders out there than DLP.
Do your own Due Diligence,,,
Wow, it feels pretty good to finally make it here to Bigger Pockets! My name is Nathan Trunfio, and I joined DLP Direct Lending Partners as the President of and Director of Operations earlier this year. First, let me say that when I came to Direct Lending Partners, there were a lot of great people trying to provide innovative solutions to a lot of passionate investors, but there were also a lot of areas we needed to improve. Direct Lending Partners has made tremendous strides to build structure and systems to serve our valuable borrowers, we have improved communication, and brought in specific staff to ensure that each and every borrower's project gets our full attention. To those of you in this thread who have received service and communication less than what you expected, I and the team at Direct Lending Partners are committed to providing the absolute best to our clients, what we call a "WOW" experience. If you have questions or concerns that you'd like to address with us, please feel free to reach out to me anytime. You can either send me a direct message or find my contact information through our company website. It is our mission to prove that a capital relationship with Direct Lending Partners will be the best choice you have ever made for your real estate investing business.
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To specifically reply to the most recent item, Marvin, I certainly apologize for your inconvenience and any frustrations.
On the appraisal fee, you are correct. It is $595 for a single-family home requiring two appraisals (and ‘as is’ and ‘as repaired value’ appraisal). Appraisals are a pass through cost. Initially, we understood this to be a single family residence, which is why you were quoted that fee. As soon as the documentation came in showing it was a triplex, we sent the notification of the additional fee. Our apologies for the misunderstanding. Also, the appraiser was not able to get into lockbox on their first trip, so they charged us an extra trip fee. As a courtesy, we paid this, but did not pass that extra fee along to you.
Also, we apologize for the misunderstanding around the fees. We pride ourselves on disclosing all costs, and I’ve recently used your post and situation as a learning experience for our sales team. I wish we would have had a chance to better explain the cost breakdown at the time. I understand from our sales representative that you were in the airport on the way overseas when he explained the fees to you. There were two options for your loan. You could have used a transactional loan or used the line of credit. The fees you listed were the fees for establishing the line of credit.
Many of our investors prefer this line of credit option since it allows them to have proof of funds for all offers, reduced due diligence fees and origination fees, the ability to cross-collateralize, fast and one-time underwriting, and we are more amenable to making loan exceptions for our line of credit clients.
We’ve made sure that all our fees are shown on our website and on our flyers.
Your advice is great: “My advice to anyone is to ASK for the lender's Pricing Summary Sheet so that you are aware of ALL of their fees.” Investors should always find out all the fees involved.
Please feel free to reach out via a direct message, or you can find my contact info on our website. I wish you all the best in the future.
-Nate
@Doran Summers who do you know that do not offer no upfront fees? They attempted to give me the same offer.
@Nathaniel Birdsong did you find someone who offered better rates or did you go ahead and go with Direct Lending Partners?