Dealing With Private Lenders

[Brian Cunningham]

I have 2-3 private lenders offering 450k for purchase and reno. Interest only payments and no DP. They're asking for 1% upfront. No escrow. How can I protect myself? What questions should I be asking of them?

My other option is to just use FHA as originally planned, but this would allow me to buy two buildings within 60-90 days.

[Mitch Messer]

Hi @Brian Cunningham and welcome to the BiggerPockets Forum!

I'm sorry: They're asking for 1% upfront for what, exactly?

Nope! Nope! Nope!

Under no circumstances should you be paying a true private lender any unspecified upfront fees. Legitimate lenders get paid at closing by the closing agent and/or over time by you via your loan payments.