Research on Hard Money Companies

[John Silva]

Hello all, 

I'm researching hard money companies to possibly use on my next investment. Has anyone used the following companies ? RCN Capital, Finance of America, or Viso Lending. There are many more out there and would like any input on those as well. My next project is buy and hold multifamily 3 units and up. Cash out refi and repeat. I will have $50k plus to invest once my flip is sold. 

Thank you Bigger Pocket community. 

John 

[Chris Mason]

I'm not a HML and do not offer them, so no reason for my answer to be biased.

From talking to lots of people about their experiences, two big things are at play with HML. Relationships are one. Repeat "no BS" customers seem to get better deals than randos cold calling 20 different hard money lenders.

Other than that, there seems to be a dial. Turn it to the left and you get lower rates/points/fees paired with far less reliability, more conservative appraising, an increased chance of that 11th hour denial, and possibly losing your earnest money deposit. Turn it to the right, those rates/fees/points go up, but so does reliability, speed, certainty, etc.

That sort of tradeoff occurs in a lot of things in life, but often the dial doesn't go too far in either direction. For example a new Chevy might be slightly cheaper and less reliable than a similar Toyota, but both meet all the minimum federal safety standards and whatnot, so I as the consumer am somewhat protected from that dial being jacked too far in either direction - there's virtually no chance that I can find a new car from a legit dealership that is priced so cheaply that is likely to explode on me the second I drive it off the lot. 

HML do not have those consumer protections, meaning you CAN find that metaphorical car that will explode on you. These are business to business transactions, you are assumed to be a business not a consumer, so you aren't assumed to "need" the extra protections from predation. Keep that dial somewhere sane in the middle, don't expect the gubmet to protect you from jerking it too far, and keep in mind those relationships.