How do you KNOW your lender isn't going to buy your find?

49 Replies

I was wondering if any of you have had doubts in sharing your candidate property address and price? If it's a sweet deal, then they could just delay your proposal and jump on the phone.... Maybe it's just me. I felt TRUST was worthy of a discussion. How do you confess everything you know and feel the organization isn't going to beat you to the punch?? Trust. Tell me how you do it.

well If a lender Is snaking deals from borrowers it wont last long.. I have been in the lending side since mid 80s we are like priests we do not talk to others and your deals are your deals.  in many instances I would be funding 5 to 6 competitors in one city.. talk about having to work in a confessional

I will tell you the number 1 reason, and it has nothing to do with trust.  It does have everything to do with why the lender is a lender.  Ready?  Here it is:

The Lender won't steal your deal, because they don't want your deal.  If they did, they wouldn't be lending in the first place.

Originally posted by @Joe Villeneuve :

I will tell you the number 1 reason, and it has nothing to do with trust.  It does have everything to do with why the lender is a lender.  Ready?  Here it is:

The Lender won't steal your deal, because they don't want your deal.  If they did, they wouldn't be lending in the first place.

 real lenders would never do this.. private lenders who are one off now that Is something to worry about.

@Peter Prawel that had never been a worry of mine. First off, as @Joe Villeneuve pointed out, a lender is a lender. They are in the business of lending and that’s what they do. Or at least that is what my hard money lenders do.

Also, I get the property under contract to buy it before I decide which lender I will use. A lender can’t just come in to say, “sell me the property instead.” They have no legal rights to it whereas I do have legal rights to it. 

If one lender were to try to do any funny business then I would just go to one of my other lenders. It is always good to have several resources for each position on your real estate team.

@Jay Hinrichs You nailed it. I worry about how much information to share with a private lender. The property is in Texas. Its dropping to about a 30% value... I just worry about revealing my poker hand before the game has started... Appreciate everybodys thoughts and suggestions.
Originally posted by @Eric Adobo :

What does property dropping 30% mean. 

Maybe it's better you not get this so called deal.

 Maybe there is nothing wrong with it.  Maybe this is the "pretty girl syndrome" (don't bother pulling a sexist card), where the pretty girl has no date because everyone assumes she automatically has one...and never bothers asking, or assumes she would say no to them.

Ask why...find out why...don't assume.  The deals you assume "something is wrong", are the deals I make a killing on because it was passed up, and I asked "why".

Oh, by the way, did I say "thank-you"?

Originally posted by @Joe Villeneuve :
Originally posted by @Eric Adobo:

What does property dropping 30% mean. 

Maybe it's better you not get this so called deal.

 Maybe there is nothing wrong with it.  Maybe this is the "pretty girl syndrome" (don't bother pulling a sexist card), where the pretty girl has no date because everyone assumes she automatically has one...and never bothers asking, or assumes she would say no to them.

Ask why...find out why...don't assume.  The deals you assume "something is wrong", are the deals I make a killing on because it was passed up, and I asked "why".

Oh, by the way, did I say "thank-you"?

 This happens. 

Dec 2o17 a Waikiki condo is listed at $185,000 no one buys it till June 2018.

I passed on it because I'm stabilizing something I bought recently. 

It just sat there in a price range all by itself. 

I didn't actually see it but listing didn't say it was a upper fixer. 

I thought it was a steal @$185,000

@Eric Adobo if only I could post a photo.... my apologies, I should have been more politically correct on SUNDAY at midnight. The notifications from Zillow show up on my phone and email by saying PRICE DROP in the headline. So I've watched trends in area with a bank owned property with lots of potential, sitting there over 80 days now... So when I said PRICE DROP, it's a Zillow thing. Also, I should have expected the grammar police would troll this site. Congratulations! Please add a profile photo. :)
@David Weintraub thank you for responding. Until a person builds a network of trusted lenders, we end up having to knock on doors and present our Property, it's Benefits and our Exit Strategy.... We are selling our idea to a Lender for a loan but we are also kind of selling the property in general. It doesn't require a huge stretch of imagination to see the temptation.

People won't steal your deal.  95% of the people you interact with during an RE transaction could't steal it even if they wanted to.  I've several people tell me they wish they could invest in RE, but they can't afford to.  These are contractors, realtors, PM's, and they come across deals on a daily basis.

Originally posted by @Eric Adobo :

You not going anywhere with paranoia mindset. 

 I think that's an overstatement.  

Bottom line is if the question is being asked the problem may exist.  Maybe on a small scale, but in a tight market, buyers are slightly hesitant to give anything away, be it to a colleague, lender, or anyone in between, regardless of the likelihood.

@Peter Prawel someone made a post here once talking about how his hard money lender kept backing out of his deals only to find out later tjat the lender bought three of them himself and kept it secret while still getting him to bird-dog more deals

@Peter Prawel - lasting businesses are built on mutual trust, built over time and multiple transactions. 

I agree with the the wisdom shared by @Jay Hinrichs @Joe Villeneuve .  If someone has a deal THAT good, in a market THIS competetive... it’s likely they have reliable financing relationship already well-established and the lender knows they’d be screwing themselves out of future business by screwing over a proven operator with an established track record.

Are there anomalies? Sure. But most of the best deals go to investors with the means of secreting them 

Updated almost 3 years ago

the last sentence had a hilarious typo. instead of "secreting"... it was supposed to say "securing." Correct version: "Are there anomalies? Sure. But most of the best deals go to investors with the means of SECURING them"

Originally posted by @Shiloh Lundahl :

@Peter Prawel that had never been a worry of mine. First off, as @Joe Villeneuve pointed out, a lender is a lender. They are in the business of lending and that’s what they do. Or at least that is what my hard money lenders do.

Also, I get the property under contract to buy it before I decide which lender I will use. A lender can’t just come in to say, “sell me the property instead.” They have no legal rights to it whereas I do have legal rights to it. 

If one lender were to try to do any funny business then I would just go to one of my other lenders. It is always good to have several resources for each position on your real estate team.

I agree with Shiloh....if you are under contract before you go to the lender you have nothing to worry about ever.

Originally posted by @Steve B. :
@Peter Prawel someone made a post here once talking about how his hard money lender kept backing out of his deals only to find out later tjat the lender bought three of them himself and kept it secret while still getting him to bird-dog more deals

most real HML I know the last thing they want to do is rehab houses LOL.. they are busy enough just keeping their own loans on track.

can it happen sure it can.. but is it the norm with larger known HML no way.. small fry private folks maybe.. but in my mind they are not in the business of making HMLs

@Jay Hinrichs Would you say its completely out of line to think that a lender may pass the information along to a more experienced investor?

Im fairly new to investing and I had the same concern on a deal im working on now. I wasn't worried about him buying it, but I was worried that he would pass along the information to someone he knew would follow through. I was a serious buyer, but I got the impression he didn't take me serious. I ended up going with someone else because of it.

Originally posted by @Brian Ellis :

@Jay Hinrichs Would you say its completely out of line to think that a lender may pass the information along to a more experienced investor?

Im fairly new to investing and I had the same concern on a deal im working on now. I wasn't worried about him buying it, but I was worried that he would pass along the information to someone he knew would follow through. I was a serious buyer, but I got the impression he didn't take me serious. I ended up going with someone else because of it.

A quality lender simply would not do that.. if you got a bad feeling then that's fine too its your deal your choice  = 

@Jay Hinrichs yes as I remember it was some podunk private lender and the story was out of LA.  It was kinda sad because the guy spent like three years trying to finance three deals and the slimeball Leander kept backing out of the deals last minute only to find out later he behind the guys back , made a better offer to the seller, told them to keep quite and bought the wholesale deals himself.

Many times people who overly worry about being scammed are scamster themselves. 

I'm not saying this is the case here But in general. 

How many times people say they don't trust bank accounts. Where does this come from. Look where they live. They live in a Scammy world.