Are there any honest HML

After spending $2000 for an appraisal for a HML out of Boulder and $2050 for his “business consultant” to come down for a due diligence inspection of my subdivision, I feel like I was ripped off when they offered $110k on the property valued at $1M.

I own an acreage subdivision with 55 lots remaining ranging in size for 1.25 to 3 acres in size for a total of 86.7 acres. A portion of the subdivision is homes only (27 lots) and the other portion allows mfg. housing. The mfg. home lots have been selling for avg. of $24,500 with well & septic for cash. Sales verified at court house.

I was attempting to borrow $500k with all outstanding debts ($144k) to be paid off and proceeds used to build houses to be sold in the $100k to 140k range. Market analysis shows this to be excellent value for this area.

So the consultant comes to town, tells you that he doesn’t pay any attention to appraisals in his analysis, is toured and given comps on competing subdivisions, toured on the subject subdivision and given comps. Spends about 8 hours in town checking court house records, being shown properties, talking with one Realtor and one developer (both of which I know) and goes home to file his “report”.

I feel blind sided when a “quick sale” value is determined by the consultant who doesn’t know this market gives a value less than what 80 acre tracts are selling for much less platted, streets in and electric and phone to lot lines are installed.

What did I do wrong to get a value like that? If my credit scores were higher I wouldn’t need a HML. I believe I have a sound business plan, data submitted is verifiable and sales estimates are conservative. The project should stand on its own and be sucessful with a positive cash flow within 12 months.

Any insite to raise the “quick sale” value, how to obtain a better loan, lending criteria, etc. would be helpful.

Hello, You have a sound project. It seems that you had some bad luck. If your deal is still good, I suggest that you try again. Be cautious, but don’t think that all HML are out to get you. There are plenty of honest ones out there. I hope you find the one for you. Good Luck!

No, my project is in the Oklahoma City area. After this little fiasco, I know what it feels like to be dirt rich and dollar poor. It seems all the other HML I talked to wanted app fees before they would even look at the project. They wanted 2 years tax returns. Frankly my tax returns suck and anyone looking at them would laugh his behind off. I was under the impression that any project should stand on its on feet. If the business proposal was sound, was backed by adequate collateral then it should be a go. Was I ever wrong.

I think you have the right idea. From what I can tell it does not seem like you have been in contact with any TRUE hard money lenders. When we evaluate deals we will look at the appraisal, ARV (after repair value), and also do a market study to make sure the property is marketable. Other than paying for the appraisal, we typically have no up front fees. I say typically because we have had to implement fees on people that keep walking away from closings. If someone is wanting to dig into your personal information, then they are not a true asset based lender. I am sorry I do not know anyone to refer you to in OK, but keep the above in mind when talking to people.

Hello, Are you still looking to get this project funded?

CML Lending -

Just curious …

In the “Hard Money Loans” section of your web site, it says “No Pre-payment Penalties”. However, in the table right below that it says “CML’s Hard Money Pre-payment: Yes - 3 mo. min”. Which one is correct?

That is a little confusing. It is basically a soft pre-pay. If you buy the property, rehab it and sell it, there is no prepayment penalty. If you want to buy it, fix it (if applicable), and then refinance it, we like to keep it for three months in that senario.

Ah, okay. Thanks for the clarification.