DoHardMoney/HML

[Brian Barnes]

So I just got off the phone w/ a Rep from dohardmoney. (A HML on biggerpockets site for IL). Has anyone used their service? How was the experience for you? As a new flipper with limited funds, you all know the frustration w/ trying to start out, so I'm looking at different options. Any opinions on dohardmoney is appreciated!

Here is what I understand about their program.

You have to put $2500 ($650 of that for 2 appraisals of property). The $1850 remainder goes back to you after you sell the property. After you put in an offer, they send out 2 different evaluators to see if the deal is good. If they approve it they provide you with $250k per property (you have access to a total of $750k). It's 100% financing. No loan payments required. Rehab and sale needs to be done w/in 5 months, or more fees will apply. You take the profit, and they charge 15% (annual rate). They loan up to 70% ARV for repairs. After that it's out of your pocket.

Each time you have a property evaluated you have to pay $650 to get the OK from them.  An obvious problem would be if they just keep saying NO, and you fork over 5k in 'evaluations' to get one funded. 

 They only let you do one repair at a time.  For example: You need to do the roof.  You let them know you are doing the roof, and they give you the funds.  Next, Siding.....and so on....Not sure why you have to do only one repair at a time (seems inefficient).  

They provide a Professional support during the journey, proof of fund letters, and other resources....

[Jacque Fairbourn]

Hello Brian – Happy to see you on Bigger Pockets!

If you would like to see what people have to say about us you can check us out on YouTube, or read some comments here on Bigger Pockets.

To address your concerns and the additional comments within this thread:

I am afraid there may have been a bit of misunderstanding as to being able to only do one repair at a time, because that is not the case. If needed we can provide a 10% advance as the first draw to help you get started and then we reimburse you for rehab expenses as the work is completed. Using the draw system you can do as much work as you can and then we can send an inspector to confirm that work has been completed. Typically investors will break up their project across 4 draws. We want to help you be successful, which means you need to get the rehab done and the property on the market as soon as possible.

As to someone repeatedly submitting deals that are being turned down, we don’t want that to happen either. For this very reason we provide our customers with access to our Advanced Deal Analysis Software that allows you to know the details and the potential opportunity for every deal before we send evaluators out to the property. In addition to this we teach you how to personally value properties so that we’re not moving forward until you have confidence that the deal you’re looking at is a good deal. If you are taking advantage of the tools and education available to you when you join, as well as our great support team than continually paying $650 for evaluations on bad deals isn’t going to happen. We’re here to help you find and value properties that we’ll lend on.

@ Jeff Lezark I agree that with upfront fees can be problematic. Having been in business for over 10 years we know it’s more problematic for customers to deal with following challenges:

• 10-20% down.
• Having Bad Credit
• Lacking Past Experience
• Lack of tools and resources to accurately value properties.
• No options for Gap Funding

At our core we are a lender, however, we've learned from funding countless deals that making our tools and resources available to our clients allows them get into better deals and avoid bad deals. We know that our financing is not the best option for everyone, but for those needing this kind of help our program is a great fit. We offer 100% financing, which includes purchase, rehab and closing costs. We'll lend up to 70% of the ARV on fix and flip loans which allows a new investor with limited funds the chance to get into investing where they wouldn't be able to otherwise.

@ Cortney Newmans I quickly reviewed your terms and I would definitely agree that for the right investors you guys are a great option. What’s unique about our system is that we don’t require 20% down for fix and flips so while our points and interest are a little higher the barrier to entry is lower allowing someone who doesn’t have 20% down to get into the game.

Our evaluations are not merely appraisals. We use 2 independent, experienced local real estate agents that are familiar with your local area who will review all aspects of the deal to determine it’s potential. They run a market analysis, they pull three actives and three sold comps in addition to doing an interior evaluation of the property which allows us to establish a pretty solid After Repair Value.

Remember, we are going to be potentially funding 100% of the deal, so the risk is increased. Using 2 Evaluators to establish the ARV offers protection not only for us as the lender, but for the investor as well. I'm sure we can all agree that an appraiser can miss the mark and so having 2 objective experts establish the value protects your interests and keeps you from getting into a bad deal. Obtaining the insight of two successful agents makes sense for both parties. This is also particularly helpful to first time investors in helping them to understand what is and isn't a good deal.