Has anyone used dohardmoney.com?

Question

Has anyone gone through with using dohardmoney.com for funding any of your flips? How was your experience? They offer 100%financing.

Jaclyn McClellan · Answer

I would avoid DoHardMoney. I don't recall the $3000 being optional, and their "tools" are nothing great, definitely not worth $3000. I submitted a deal through them and their appraiser came back with a value of $265k... if you saw the comps your jaw would drop just like mine did. He selected comps that literally hadn't been rehabbed...as if he just randomly picked properties in the area with the same bed/bath count. Also didn't listen to me when I said we were going to do high-end finishes. I ended up going with a different HML and the same property appraised for $375k (sold last month after the rehab for $382,100).

Lastly, their customer service responses are slow and so is their process. If you need funding quickly, definitely avoid this place. They require to talk to the contractor and make them do a lot of up front work (which is good in the long run but some contractors may not be willing to do this much work for free).

100% financing sounds great and is hard to say no to, especially when you're starting out and don't have the funds and just want to get started. But from actually making this mistake, if you don't have the money to put down (or the ability to get it from someone else) then you shouldn't do the project. Rehab costs almost always end up more than you originally expected.

Jacque Fairbourn · Answer

@Jason DiClemente - yes we fund deals for people not enrolled in the system. If you have a property under contract you can fill out a loan application on our site and we can begin to look at it to see if we can fund it.

Jacque Fairbourn · Answer

@Christi Hawkins and @Jay Hinrichs

Happy to once again provide clarification. I am the Director of PR and Organic Search for DoHardMoney.

The $3000 is for enrollment in our 100% Financing System which includes the tools and resources to help new investors learn how to recognize the type of deal that would qualify for no or low cash to close. The $3000 is NOT a down payment and does not go toward paying for the property that is part of a deal. It is not part of a property purchase. It is for a product and service. Yes, we do include one property evaluation as part of that product and service, but the money is for enrollment in that system designed to help new investors. Period. It has nothing to do with whether or not a specific deal is funded.

If we turn down a deal the member still has access to all of those tools and resources, they are not "out" anything. They can and should continue to use what they purchased. If someone loses any earnest money it is usually because they did not use those tools and resources and therefore likely either  did not word their contract appropriately or did apply the other recommendations we make. Sure, sometimes real estate investors lose earnest money, that has probably happened to many experienced investors on this forum, but the way we recommend writing an offer and contract can really cut down on that.

We don't charge any loan costs until we actually fund a deal either. The $3000 is not part of the funding, it is for one of our products. We do a lot of deals that are no or low cash to close, but we do many more that are not. So yes, ONE of the products we advertise uses this as part of the marketing, just like a home improvement store may show a particular carpet and tout it's benefits on a billboard, or a car dealer will show special price and financing for one model of a car.

Jay Hinrichs · Answer

Christi don't think that's correct you have to pay the 3k up front .. you do get their books and tapes.. and you do get a rebate if they fund.. but if you can't find a deal that meets their criteria they keep the 3k and your out that and your submission fee and your appraisal fee and your EM.  the rub comes with most lenders don't charge this until they actually fund..

But I get it their borrower is driven by the No money down come on... but at the end of the day its NOT a true no money down you need money down to start..

Latasha Jackson · Answer

@Jaclyn McClellan did you use a local HML? If not do you have any recommendations on a few hml I can vet?

Jaclyn McClellan · Answer

RealtyShares. They were much better to deal with, the appraisal came in where we needed it to (we sold above the original flip-appraised value) but much better.

Christi Hawkins · Answer

@Jay Hinrichs  Thank you so much for the explanation, I really appreciate your input. Everyday I'm still amazed at how different the investing side is and how little I know about it after 20 years in the Real Estate business. I have a great deal to learn. I've been reading everything I can here, watching every Podcast. Reading books, taking classes and I've at least narrowed my target area to 3 zip codes. I'm studying those markets, watching every listing, every sale and driving through the neighborhoods and I think I've found my agent. But her job isn't to educate me, that's my job and as a new investor, I'm still tying to decide which way is the best to move forward. I'm working on my business plan to present to a couple financial partners that may be interested in partnering with me based on the experience I have and I've worked with them in the past, so that's one option for me as far as financing goes. My real question is, as a brand new investor, attempting to invest in a different market than my own, having someone guide me through it to avoid as many pitfalls as I can is a good idea. How much would a coach cost? What's wrong with a company creating valuable information that someone like me could benefit from? Based on the comments I've read I think most people are combining DHM services, instead of viewing them as 2 separate things. They are a hard money lender AND have a system you can purchase to have access to those systems and an adviser. Yes, most lenders provide a project manager as you've said but that's not what the $3000 buys you, the project manager comes with any deal you do. The $3000 is NOT mandatory, as it has been explained to me, it is a choice to purchase or not, it doesn't affect any deal you submit to them for review. I do know several people that have rehabbed houses with them, followed their program, listened to their advice and were very successful, so it does happen. So for someone like me it's not only having an option for 100% financing, although, I know there will be costs involved I haven't even thought of yet but it's having someone go through this with me that attracts me to Do Hard Money. I won't be out there on an island by myself, there will be someone I can go to when something goes wrong or I didn't estimate something correctly. I could spend every weekend from now until the end of year paying for those "weekend workshops" and after I've spent more than $3000 on those "books and tapes" what would I have, nothing but books and tapes. I understand everyone is different and you have so much experience under your belt, maybe this does sound ridiculous to you or some kind of scam but in my case, if I don't have investors on board this would actually be an option for me to get into the investing business and have a partner by my side. I still haven't decided which way I'll go but I feel like I have at least 2 good options, which is 2 more than I had 6 months ago. I promise you I wish I could just write a check for everything but that's not my situation yet, but I have been saving every penny. Thanks again for your advice and taking the time to comment.

@Jacque Fairbourn I wanted to thank you for being willing to comment on this as well. You always seem to take a beating on here when you do but I really appreciate you taking the time to clarify all this for me