I’ve been looking at a website that is offering financing and part of it says they do 100% financing, “”“BUT”“” they also say that 100% financing may not be available “”“unless you become a member or join their club”“”.
They say they want you to become a successful Real Estate Investor, “”“BUT”“” it seems like they want you to spend money on memberships and clubs (money that you don’t have to begin with) before they will finance your projects.
The thing they are talking about is GAPS: fees, earnest money, closing cost, etc., etc., etc. that they may not cover and you have to have to have in the beginning process and at closing.
Are there really 100% hard money lenders out there that do actual 100% financing like they advertise?
If you stop and think who would do 100% when you have nothing to lose? Next you be asking for re-hab cost, insurance, money. Jim who told you that you could get in this business with no money?
Well Mr.Ryan G. Wright @ DoHardmoney.com is the website that I looked at and commented on a forum post here with him recently.
Are you telling me that he’s not doing what he says even though he would be splitting the profit 50/50, so this is all a hoax??? Don’t tell me he’s just another GURU please. I think we’ve seen enough GURU’s to last a lifetime.
Everything I’ve read from the website and e-mails that I’ve received say 100% financing, but I’m seeing some discrepancies in that if you don’t become a member or join the club than you are not eligible to get the 100% financing.
That’s the reason for my question “100% hard money financing??? Is it really available???”…
It depends on your idea of 100%.
The HML’s I use will fund purchase price, rehab and closing costs if all those are less then 70% ARV.
I still have to come up with the earnest money ($1000) to lock up the contract. Money for inspections ($500) and appraisal fee ($450).
The earnest money is credited to you at closing but you are out of pocket the $950.
You might have to pay an initial $20 for the HML to pull a credit report if you’ve never done a deal with them.
They will usually run comps on the property you are looking at and will require bids for the rehab before agreeing to fund the deal. They should tell you up front what their fees are and how much of the deal they are willing to finance.
You also usually have to front money for the rehab. You can take draws against the rehab escrow as work is completed. There are fees for the HML to inspect the progress and fund the draw. ($100-$200).
So yes it’s available but you will still pay some money out of pocket to do the deal.
Why give away 50% of the profits on top of all of the interest you have been paying? Better to “birddog” a few deals until you have some capital then borrower HM and pay your points and fees at closing. It will make you more money in the long run and is IMHO a smarter strategy. Just my $0.02.
The hard money lender I use in Mobile, Al will give me 70% ARV - 12% interest only - 4 points that get added to the loan - 6mos-60mos term - This is all inclusive and can cover all closing costs, title and inspections as long as your still below the 70%.
There is no law that says you have to put down earnest money. This is the biggest in real estate and realtors make you believe it because it makes them and the seller more comfortable that you will follow through with the deal. Most banks the have REO properties will require earnest money though.
I will generally put up $250 earnest for up to $50,000 purchase price, $500 for $50,000-$100,000 and $1000 for all purchases over $1000, and I get all back at closing.
This creates a 100% no money down deal for me and he will lend to me under this umbrella all day long.
