Posted by Dan-Fl on July 21, 2003 at 10:18:54:
Yes they wrap everything into the loan,so with the deals I find it is no money down.e-mail me and I will tell you who they are,but they only lend local No more then a hour drive from there office.
good hard money? - Posted by john
Posted by john on July 20, 2003 at 08:10:27:
My question or concern is this: I had thought I had all the bases covered when I found the two top hard money lenders in the state of washington. wrong!
The problems are I don’t trust these companies completely, and the only way for me to find out is by possibly wasting a deal on them to see what they are really made of.
The hard money lender in general looks at a newbie as his meal ticket. They know you have just gotten lucky and they will never in a million years see you again?
How to you avoid this? I may have another deal under contract in about 2 weeks and my fico score based lending is going to be all dried up after maybe 2 NOO deals. Then I will have to hard money, or some other private source?
John
Re: good hard money? - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on July 21, 2003 at 01:36:16:
John–(WA)---------------
How do you check out any potential new supplier of services? Ask for references of other investors that they have done loans for. Ask for both some longer-term borrowers and some that are fairly recent.
Why do you feel that they would want to harm you?
Stop and put yourself into their places. These are successful people who have extra money to invest. They don’t like the looks of .8 of one percent from the banks. So they loan out money at maybe 8 percent a year, 10 times as good. What would you do in their position? You want to be assured that your borrower pays you back, so you take a security instrument on the property, with a big equity cushion in case you end up having to foreclose and resell the property. What would you do to protect yourself if you were the lender?
Good InvestingRon Starr*
Re: good hard money? - Posted by MJK
Posted by MJK on July 20, 2003 at 10:12:10:
I’m sure they didn’t become the top two in the state by screwing over every investor that comes along.
Build a quality business relationship, make them a partner in your success. If you make money, they make money, its that simple.
- MJK
Re: good hard money? - Posted by Marcos
Posted by Marcos on July 20, 2003 at 09:37:19:
It’s an interesting belief you have there John. I have used about 4 or 5 different hard money lenders and have been treated fairly by all of them. Why do you feel that these companies are out to get you? And how do you feel they can “get you”?
It’s really a pretty simple concept, you put a package together for a loan, and then you give it to them, they usually tell you in 24-48 hours if this is a deal they want.
And realize that most hard money lenders are successful based on their reputation. It’s silly to think that they would look to screw every newbie that comes their way. Because not every newbie ends up failing. And investing is such a good-old-boy network, it just doesn’t make any sense.
HTH,
Marcos
Re: good hard money? - Posted by john
Posted by john on July 21, 2003 at 09:26:51:
WOW great advice, thanks a bunch Ron!!! 
I should have my next deal under contract right after I get home from vacation around the first week of august.
I will do exactly what you said, and this is what I should have been doing all along.
Do not let them interview me, take control and interview them!
VERY good advice!
Re: good hard money? - Posted by John
Posted by John on July 20, 2003 at 10:28:18:
Maybe my tone was a bit to strong, I have already experienced some change of terms with one of them. But, I must say there service and answering are very fast. They claim to have one customer who has returned for a total of 3 large deals?
But I just don’t know for sure, small warning bells are going off in my head and it has been my experience that you should always follow your gut feeling.
Many, many years ago I did appraisals for hard money guys. And all if not most of those loans where one shot deals. I guess possibly my comments are rather misdirected, but being that I am the little guy just getting back in the real estate game, my gut feeling is that dealing with the biggest firms who typically fund $500,000 plus deals may not be a good fit.
I am still rather green to the whole real estate investing life style, but my thinking is now that it would be superior for me to hook up with a smaller private firm/or investor to assist me in funding deals?
John
Re: good hard money? Additionally - Posted by john
Posted by john on July 20, 2003 at 13:55:27:
There is a good old boy network firmly in place here in the Seattle area for hard money. I just called a guy about private money here seattle 15 minutes ago and low and behold it is the same run around, they want all your property and all your money in the deal. Doesn’t matter if it is 70% LTV, 60% LTV, 45% LTV. They all have a standard practice, first they will say sure we will do the deal, then you will get the e-mail back that they also want 10K down or other real estate in the deal ect etc etc.
Funnier then that the guy says, “oh i can buy 60%LTV deals all day long” LOL. What BS!!!
If you are a little guy coming up and you actually get a loan from them it is possible that they will simply closet all your payments, that’s right you come in with a payment and they can just rip it up and into the trash it goes. The idea being if they have been successful at getting all your cash reserve into the deal, you will be 60 days late before you know what happened.
Hard money in the Seattle area is all about POWER period! Please prove to me that I am incorrect, get the seattle times on line sunday money to loan section and make a call for yourself, the big three firms will tell you whatever you want to hear to get you to the closing table?
Please understand that none of this will even remotely have the power or influence to stop me! This is just another challenge, and why should I expect any other investor to share his or her great source for private money here in seattle. I will make it happen on my own PERIOD.
Re: good hard money? Additionally - Posted by Marcos
Posted by Marcos on July 20, 2003 at 22:04:23:
Well my friend, I have to go back to your beliefs again. So far, this is what you said.
The problems are I don’t trust these companies completely…
the only way for me to find out is by possibly wasting a deal on them…
The hard money lender in general looks at a newbie as his meal ticket. They know you have just gotten lucky and they will never in a million years see you again?
small warning bells are going off in my head and it has been my experience that you should always follow your gut feeling.
What BS!!!
If you are a little guy coming up and you actually get a loan from them it is possible that they will simply closet all your payments, that’s right you come in with a payment and they can just rip it up and into the trash it goes.
Hard money in the Seattle area is all about POWER period!
This is just another challenge, and why should I expect any other investor to share his or her great source for private money here in seattle.
John, your beliefs are going to hold you back my friend. You have chosen to believe that everyone is out to get you. I personally know that if I was in Seattle, I could find 3-5 hard money lenders who were fair and firm in 24 hours or less. I know it. Do you? I use two hard money lenders now. Both charge 14% and two points. I don’t get an appraisal. I don’t do anything but bring them the deal, and they say yay or nay. I have a great relationship, and I do a lot of business with them.
My advice to you John, it’s not a problem with your money lenders, it’s the noise in your head that is tripping you up. I suggest you do your homework, get a deal, A REALLY GOOD DEAL, and come in with all your homework ready for them, comps, estimates, work plan, exit strategy, etc. And then present your deal in person, you’ll find you’ll get a much different reception. If you truly have all your homework done, you’ll be golden.
HTH,
Marcos
Re: good hard money? Additionally - Posted by Kristine-CA
Posted by Kristine-CA on July 20, 2003 at 18:26:07:
John: if you want to know what kind of deals these lenders do, look up their names or dbas in the recorders office (or online if available) and take a look at what they are lending on and to whom. I had a buyer that used an HML that I was wondering about. I checked the list of recorded trust deeds, I recognized many of the names of other investors I know in the area (and the properties). And I checked with other investors about him. They all think he is ok. Feels a lot better than hoping it will be ok.
However, to be fair, I’m talking about true equity-based lending. No credit score. No points. No fees. But very high interest. This wasn’t rehab lending. The only way you can use the HML money I’ve found is to have a VERY good deal so that 70% will do what you need it to do.
To be honest, I am amazed that rehab hml lenders can loan they way they do. If the property needs repairs, how can anyone expect them to just lend on the hope that one will make the repairs and sell the property. And they’re supposed to trust someone with a low/no credit score and none of their own cash?
I mean, would you loan money under those cirucmstances?
I have no doubt that you can make it work on your own or that you will find a lender. But it might be a good idea to think about where hmls are coming from.
Sincerely, Kristine
Re: good hard money? Additionally - Posted by kgrant
Posted by kgrant on July 20, 2003 at 14:16:10:
Yeah,
I know what you mean. I have read and read and read from the Guru’s you can borrow from a HML all day long based on the deal. HA! Aint so. I have yet to find one who will lend without a FICO of at least 550 and want substantial cash in the deal. To top it off 18%, 5 points and hefty pre pay penalty.
I almost think the Guru’s should stop propmoting this you can start with no money with HML’s out there. I have heard this over and over again from others getting into this.
You either have to have good credit and cash or they won’t do it. I say if it’s true then some investors ought to step up to the plate and offer funds.
I have given up on HML’s.
KGrant
Re: good hard money? Additionally - Posted by John
Posted by John on July 20, 2003 at 23:21:06:
Well maybe I was just ranting, and the 13% to 15% I have no problem with, but 2 points? Two points? hmmmmmmm I would have to consider that a while, I mean again if you build up relationship with lender and you bring in deal after deal, sure maybe 2 points. But most if not all the lenders here don’t even charge outside brokers just 2 points. I mean the bottom line is that this is the bulk of the HML profit, the points.
I knew some lenders in california who used to charge 10 to 15 points! LOL
Anyway, no worries, all the deals I want to do I already have the funding lined up. I was just blowing of some steam. Maybe some day I will see a 2 point HMD?
Re: good hard money? Additionally - Posted by jenv
Posted by jenv on July 21, 2003 at 15:39:32:
>To be honest, I am amazed that rehab hml lenders can
>loan they way they do. If the property needs repairs,
>how can anyone expect them to just lend on the hope
>that one will make the repairs and sell the property.
>And they’re supposed to trust someone with a low/no
>credit score and none of their own cash?
It’s the same strategy credit-card companies use. They don’t care about defaults, because the risk is built into the cost of funds and LTV.
Re: good hard money? Additionally - Posted by Dan-fL
Posted by Dan-fL on July 20, 2003 at 20:08:19:
Most of the deals I do are more like 50% Ltv.The hard money lender I use is great.They lend 65%Ltv and hold repair money in escrow.They send out a guy who looks it over from the start and makes sure you do all the repairs in a timely manner.You get to make 4 draws and everytime you must call him to come over and check out your work.So in there case,there is not just hope that you will do the work,because if you don’t then you will lose the house.As I build up my cash reserves over the years I think I will look into becoming a HML myself.
Re: good hard money? Additionally - Posted by Dan-fl
Posted by Dan-fl on July 20, 2003 at 20:13:41:
You have not found a true HML yet,keep looking.They don’t care what your fico score is or if you have any money to put down.All they care about is if you have a good deal.Find a real HML,find a good deal and you will get the money even if your a bum living under a overpass.
Re: good hard money? Additionally - Posted by James Strange
Posted by James Strange on July 20, 2003 at 18:06:04:
I work with one that works with scores below 500. But the deal has to make sense. They want to know how they will get paid. So the deal has to be put on paper with all of the numbers.
When people come to me looking for Hard Money I will not even call the lender untill I have that info.
The bad side is that:
they will not loan less than $100,000
Work must be done by a licensed contractor
No delay of payments
You must have a solid game plan in place.
The good side is that they have good rates, for hard money that is.
James Strange
Re: good hard money? Additionally - Posted by John
Posted by John on July 20, 2003 at 17:27:09:
Exactly, the HML looks at the new RE investor as a nuisance, they feel that the deal should have gone to them first anyway. So sure if you have a HI net worth, or you have worked with them in the past, they may do the deal based on the deal alone. But if you are rather new or naive, there real goal is to take you out of the game. They don’t like the competition from new money in there game.
This is simply the nature of business when there is large possible profits involved.
1 month mewbie John
Re: good hard money? Additionally - Posted by jorge
Posted by jorge on July 22, 2003 at 10:34:35:
Even 10 to 15 points…still better than finding a money partner and giving him 50% of any and all profits… right?
but what do I know… still just the new kid on the block…
Re: good hard money? Additionally - Posted by James (FL)
Posted by James (FL) on July 20, 2003 at 21:28:42:
Dan,
Just a quick question. With the 65% LTV, will they finance closing costs and points as well, or delay the points until you close (resell I mean)? Also, would you mind referring me to them? I am new to Florida, and looking for a good HML down here. Thanks in advance for any help you can offer.
Great Investing
James
Re: good hard money? Additionally - Posted by jorge
Posted by jorge on July 20, 2003 at 20:12:59:
Does your hml do loans in NEW MEXICO?