Hard Money Loan Gone Wrong

[Matthew Barnauskas]

I purchased a fix and flip using Hard Money Back in October. This was a joint venture where I put 10% down of the total cost to purchase and rehab and I would split the profit with the lender (80% to me 20% to the lender). Purchase price was 129,000 and estimated rehab of 100k. All in the funding company would be contributing $220,000 and I had put 25k down. I paid points on the loan origination at 0.05% and that was based on their rehab contribution of $220k.  They conducted their own inspection of the property and we drafted a draw schedule. I was to pay for part of rehab out of pocket and then be reimbursed. Problems arose when an unforseen foundation issue on an old addition put a halt on repairs. When I went to funding company for a draw to repair foundation they refused because I would not be following the agreed upon draw schedule. I had already put over 10k into this and did not have enough liquid to do the foundation repairs without a draw. I ended up selling the property without taking out any of the draws. My question is am I entitled to a refund of the points I paid on the initial loan if I never took out a draw? Its a difference of over $7,000

[Matthew Barnauskas]

I will do some more digging. Luckily I got a good deal and was able to cut bait without taking a huge hit.