Disclosure- CEO DoHardMoney
@Ryan Blake - no one 'loses' the $3000 'deposit' because it is not a deposit, but the enrollment cost for the progema in which they enrolled. If they give up because finding a property was harder than they thought is was going to be they still have the program that they paid for. They still have the software, the deal desk team, the phone support etc.We have some people come here to this forum claimer that we would not fund any deals for them when we have even extended a loan offer to them on properties. Not every deal we fund will qualify for no cash to, no do we ever promise that if they enroll that we will fund a deal that does not meet that criteria at 100% just because people are enrolled. Most of the deals we fund do require some cash to close, but there are many where we can fund 100% of the purchase price, 100% of the rehab costs and 100% of the loan costs.
What is often misunderstood is that when we look at the profitability of a deal we look at all costs, even those not part of our rates or fees, like holding costs and agent commissions.If a deal is not profitable after those things have been considered then we don't extend funding. So other lenders may laon on a property that we will not because they are not concerned with whether or not the borrower makes a profit, only with their costs being covered.
When we take on the risk of lending to someone who has never flipped a house before, or someone with a low (say 580) credit score, or of funding 100% of the entire deal we do need that borrower to utilize our Find-Fund-Flip System. If a borrower doesn't fall into one of those higher risk categories (or their partner does not) they need not enroll. We can extend funding to them through one of our other loan programs.
We are not perfect, nor are we the best lender for every investor, but no one 'loses' a deposit.
Also- to address the local lender question, we use 2-3 independent evaluators in the immediate area to help us determine the profitability of a deal. These are professionals who have no stake in whether or not a deal will receive funding. Before we extend a loan offer 18-24 comps are required. We look at not just the comps, but we also need to be relatively sure that the property can sell within the loan term, which makes the guidelines for that type of loan very tight. Many times the deal itself will qualify for another of our loan options with a down payment or monthly payments, but the borrower either doesn't have the cash needed or cannot qualify because of credit. If you want 100% purchases price funding, 100% rehab cost funding, 100% loan cost funding and no monthly payments the deal must meet those very tight guidelines.
