Private Money Lender

10 Replies

Ok so I am trying to get into real estate investing. Enter Private money lenders. One I am dealing with says the process the loan at %100. But let’s say your loan in is 40K, they give you 45, you take 40 and send them 5K as a fee. Is this legit? Please go easy on me, I’m just trying to get off the ground, but not get scammed.

this is whats called an Advance fee scam.. If I was you I would get on American Greed's website and look at the case on

Remington financial.. and the lady that brought them down.. Ingrid Robinson. 

these scammers prey on new real estate investors.. easy targets.. just don't know what you don't know .. but you were smart enough to post here.   now the rest is up to you.

Originally posted by @Damien Smith :

@Jay Hinrichs Thanks so much for breaking this down.

bottom line is never send money up front..  true lenders only ask for you to pay for appraisal and credit report if that. 

@Jay Hinrichs thanks Jay. I have one more question though. If that’s the case how should private lending work, because even a hard money lender at %6.5 wants %20 percent up front for a 75K property?

Originally posted by @Damien Smith :

@Jay Hinrichs thanks Jay. I have one more question though. If that’s the case how should private lending work, because even a hard money lender at %6.5 wants %20 percent up front for a 75K property?

 that's not a real lender  there is NO HARD MONEY at 6.5% you have run into a fake lender

do yourself a favor and pop on to Lendinghomes  website and look at their pricing matrix.. its very good look at your experience level and then see what the rate is .. that is what is normal in the markets today.. I mean I pay that for bank loans.  right now 9% is about the best you can get for very well qualified and experienced flippers..  a little less sometimes.

If you go through lenders like COGO Capital, Groundfloor, Visio, Brisco, Lime One etc you will never have a problem. They all offer great customer service. A lot of loan products. Portfolio loans are now available so you can wrap a lot of properties for rentals into one package. I see great things daily from them.

Groundfloor is crowdfunded and you can get close to 9%. COGO has great rates. With any lender you can also buy down the rate. COGO will also send you a loan analysis before you acdept and this gives you 3 options and they will estimate your ROI and profit for each option.

With these lenders you may sometimes have to pay an application fee but right now its around $199.00. They just use it to deter timewasters that cost them money. You will also sometimes get asked to pay for the Appraisal. Some products include it.

COGO also has a POF letter you can get for $5 and a Collateral DNA Report which is like comps with superpowers. It's an incredible product that generally is in line with the expected appraisal.

@Damien Smith No problem. These lenders are all compliant with the SEC. They use brokers and unless they're a captive broker like a captive insurance agent they can do it for multiple lenders. I am primarily brokering for 6 but have a database of 200 fund managers, capital companies and bank like lenders I can access. I also am developing my own fund. One will be a Closed Membership Fund exclusive for 100 members. 

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