How to Vet a private/hard money lender

Question

Hi BP,

I'm looking to buy a deal and its a bit bigger than what I have in reserves to buy it cash and refi out later.

i have just recently bought my first deal cash and will BRRRR it. though its a light BRRRR because there's a tenant in it now but i can still add value with them there.

The deal im looking at is $105K for a duplex in indy. its sec 8 and the combined rents are $1747/mon. i would love to buy this cash and refi later.

i found someone on the BP facebook group who consideres himself a private lender.

hes offering btw 20k to 2m at 5% between 6 months to 10 years no prepayment penalty and 2% originator fees.

im trying to figure out if hes a good lender and not sure how to vet him out.

would love any advice or recommendations of lenders you have used previously.

thanks in advance.

Jay Hinrichs · Answer

this lender is a fake lender and a fraud.. you will just give them some money up front and never see it again and never get a loan

internet BP facebook linkden is infested with these fake lenders.. no ONE offers terms like those.. no ONE AND I MEAN no ONE LENDS 20K AND UP TO 2MIL TOTAL FRAUD AND FAKE..

Greg Dickerson · Answer

What @Jay Hinrichs said plus never pay any fees up front. If someone is asking for a fee they are not legit.

They should also have a company email and be listed as an employee. If you look at their profile and they have multiple jobs they are not the lender.

Jay Hinrichs · Answer

Any private lender offering 5% interest is not real... the only rates that low are Freddie fannie backed loans generally on owner occ.

private money starts at 8 to 10% and those are HML which sometimes call them selves private money lenders same thing.. different name is all.

again this is the new Nigerian prince scam that has come to real estate lending.

Watch the American Greed episode on Remington financial and google Ingrid Robinson.. I tried to get Ingrid to come on Bp with me but she declined.

Tj Hines · Answer

@Henry Offiah, I've never heard of a hard money lender lending at 5%. That's not normal whatsoever. Good luck my friend

Henry Offiah · Answer

@Jay Hinrichs thanks for the information i had my doubts and was weary about it, i even tried calling the number he provided, and he didn't have a personalized message, it was one of those weird automated messages which doesn't state the company name or anything useful. i would think any lender would want to have some sort of personalized message.

i will continue my search for lenders as i have prospective deals in my path currently.

How to Vet a private/hard money lender

How to Vet a private/hard money lender

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