Private money lender, scam?

Private Lending & Conventional Mortgage Advice

Private money lender, scam?

Member since 2023 · 191 posts · 21 votes

Just wondering if this private money lender is to good to be true, i found it on my facebook group, its from crown lending with website at loandirectllc.com, they ask me if i had a property yet , i told them no, i just said pp- 120k, rhab- 40k, all in at 160k they said

LOAN REPAYMENT SCHEDULE

Loan Balance:$160,000.00
Adjusted Loan Balance:$160,000.00
Loan Interest Rate:3%
Loan Term: 30 years
Monthly Loan Payment:$674.57
Number of Payments:360
Cumulative Payments:$242,843.13
Total Interest Paid:$82,843.13

80% ltv on Rehab and this is 100% financing so no cash out refinancing

Note: The monthly loan payments was calculated at 360 payments of $674.57
IF YOU TOTALLY AGREE WITH THE TERMS LISTED ABOVE, KINDLY SUBMIT A SCAN COPY OF YOUR VALID ID CARD AND A RECENT PROOF OF INCOME RECEIPT FOR VERIFICATION BEFORE WE PROCEED FURTHER WITH APPROVING THIS LOAN.

Your Satisfaction Is Our Priority.

Anyone have ides

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

3y

I will be more direct.. this is hands down a fake lender full stop..

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Charles Carillo
Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes
3y
2 Reply
Charles Carillo
Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes
3y
1 Reply
Chris Kendrick
OP
Member since 2023 · 191 posts · 21 votes
3y
Quote from @Charles Carillo:

So i guess your saying they just listed , probably a scam
1 Reply
Chris Kendrick
OP
Member since 2023 · 191 posts · 21 votes
3y
Quote from @Charles Carillo:

So i assume a scam
0 Reply
Charles Carillo
Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes
3y
@Chris Kendrick
I have never worked with this company but you might want to look into a couple of things. Their website is 2 months old, their company is not registered in GA, and they offer a 3% rate for 30 years. Unless the closing costs are crazy high, I don't know why they just wouldn't just purchase a 30-year US Treasury at 3.696% (risk-free). It is a better return, and much safer.
3 Reply
Doug Smith
Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
3y
I assume that interest rate is missing a 1 in front of the three? Fannie rates for owner-occupied mortgages are in the low to mid 6%s right now. No way they are charging a 3% rate without a significant, significant buy down...that is...if they will let you buy it down that low in the first place. Rehab loans are 11%-12% with points these days.
2 Reply
Chris Kendrick
OP
Member since 2023 · 191 posts · 21 votes
3y
Quote from @Doug Smith:

I assume that interest rate is missing a 1 in front of the three? Fannie rates for owner-occupied mortgages are in the low to mid 6%s right now. No way they are charging a 3% rate without a significant, significant buy down...that is...if they will let you buy it down that low in the first place. Rehab loans are 11%-12% with points these days.
I hope there wouldn't be a 1 in front of 3, that would be 13%, what is normal rate for a private money lender, they usually lower than normal rates
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
3y
I will be more direct.. this is hands down a fake lender full stop..
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9 Reply
Chris Kendrick
OP
Member since 2023 · 191 posts · 21 votes
3y
Quote from @Charles Carillo:

@Chris Kendrick
I have never worked with this company but you might want to look into a couple of things. Their website is 2 months old, their company is not registered in GA, and they offer a 3% rate for 30 years. Unless the closing costs are crazy high, I don't know why they just wouldn't just purchase a 30-year US Treasury at 3.696% (risk-free). It is a better return, and much safer.
He said they been in business for over 10 years and there website been upgraded a few months ago
1 Reply
Chris Kendrick
OP
Member since 2023 · 191 posts · 21 votes
3y
Quote from @Chris Kendrick:

Quote from @Charles Carillo:

@Chris Kendrick

I have never worked with this company but you might want to look into a couple of things. Their website is 2 months old, their company is not registered in GA, and they offer a 3% rate for 30 years. Unless the closing costs are crazy high, I don't know why they just wouldn't just purchase a 30-year US Treasury at 3.696% (risk-free). It is a better return, and much safer.

He said they been in business for over 10 years and there website been upgraded a few months ago
They said they are:
Registered in CA and have branches in most states and the founder is Olga Krueger.
1 Reply
Juan Lara
Lender · FL · Member since 2023 · 20 posts · 6 votes
3y
The rate is too low for starters, besides that they gave you a rate without even having a property address, and as my colleague mentioned the website is very new. There are too many red flags and it sounds too good to be true. It's a scam.
0 Reply
Chris Kendrick
OP
Member since 2023 · 191 posts · 21 votes
3y
Quote from @Juan Lara:

The rate is too low for starters, besides that they gave you a rate without even having a property address, and as my colleague mentioned the website is very new. There are too many red flags and it sounds too good to be true. It's a scam.
The site been upgrade like 2 months ago, but yeah seem like a scam
0 Reply
Chris Kendrick
OP
Member since 2023 · 191 posts · 21 votes
3y
Quote from @Juan Lara:

The rate is too low for starters, besides that they gave you a rate without even having a property address, and as my colleague mentioned the website is very new. There are too many red flags and it sounds too good to be true. It's a scam.
The rate without property address doesnt have a red flag for me, i know tons of lenders give me quote without a property address
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
3y
Quote from @Chris Kendrick:

Quote from @Juan Lara:

The rate is too low for starters, besides that they gave you a rate without even having a property address, and as my colleague mentioned the website is very new. There are too many red flags and it sounds too good to be true. It's a scam.

The rate without property address doesnt have a red flag for me, i know tons of lenders give me quote without a property address

then play along with them and see how it goes for you.. sounds like your determined to get this 3% loan when NO 3% loans exist in the market today.
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7 Reply
Mark MunsonBusiness Member
Lender · Orlando, FL · Member since 2022 · 440 posts · 300 votes
3y
Quote from @Jay Hinrichs:

Quote from @Chris Kendrick:

Quote from @Juan Lara:

The rate is too low for starters, besides that they gave you a rate without even having a property address, and as my colleague mentioned the website is very new. There are too many red flags and it sounds too good to be true. It's a scam.

The rate without property address doesnt have a red flag for me, i know tons of lenders give me quote without a property address

then play along with them and see how it goes for you.. sounds like your determined to get this 3% loan when NO 3% loans exist in the market today.
Seconded. There is absolutely no newly originated 3% loans out there. This is undoubtedly a scam.
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2 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @Jay Hinrichs:

Quote from @Chris Kendrick:

Quote from @Juan Lara:

The rate is too low for starters, besides that they gave you a rate without even having a property address, and as my colleague mentioned the website is very new. There are too many red flags and it sounds too good to be true. It's a scam.

The rate without property address doesnt have a red flag for me, i know tons of lenders give me quote without a property address

then play along with them and see how it goes for you.. sounds like your determined to get this 3% loan when NO 3% loans exist in the market today.

and then they said please wire your 100K to this and this bank account, and after that voila, you reported to BP that your money is gone LOL
it is very obvious why they give you 3% rate, it's very classic to scam people.
2 Reply
Alex BekezaBusiness Member
Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
3y
If you have to ask. It's PROBABLY a scam. Any legit lender will have a respectable online presence and many online reviews.
Nobody is loaning anything at 3% right now.
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0 Reply
Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
Do not work hard/private money you found from a marketing campaign. Work with those who have worked with those you know.
1 Reply
Jeff S.
Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
3y
TAKE EVERY DIME THEY WILL LEND YOU.

With the Federal Funds Rate at around 5% now, it costs even Bank of America more than 3% to borrow money. You could earn interest by lending to them. You could also lend the money privately and make a huge spread using the current, honest, P/HML rates of between 10% to 14% now. That's what money will realistically cost you in today's market.

Of course, this is a scam. @Chris Kendrick. Though it seems you want to be convinced of that.
1 Reply
Charles Carillo
Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes
3y
Quote from @Chris Kendrick:

Quote from @Charles Carillo:

@Chris Kendrick

I have never worked with this company but you might want to look into a couple of things. Their website is 2 months old, their company is not registered in GA, and they offer a 3% rate for 30 years. Unless the closing costs are crazy high, I don't know why they just wouldn't just purchase a 30-year US Treasury at 3.696% (risk-free). It is a better return, and much safer.

He said they been in business for over 10 years and there website been upgraded a few months ago

The screenshot I sent is of their domain registration. If they upgrade their website, it has nothing to do with their domain (registration). The registration just shows when they registered the domain.
0 Reply
Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
3y
@Chris Kendrick
a private money lender is your uncle or your dentist
if you want to meet legit hard money lenders go to meetups and meet them in person
1 Reply
David Dachtera
Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
3y
@Chris Kendrick,
Yes - red flags.
On the other hand, they didn't ask for money up front, just your personal info.
An established business would be better. That said, I got my 3rd job ever (installing car stereo and alarms) when I asked the boss how does one get experience if no one will hire you. Everyone's gotta start somewhere.
My $0.02 ...
0 Reply
Romtein Rostami
San Juan Capistrano, CA · Member since 2013 · 4 posts · 0 votes
3y
Seems like beating a dead horse at this stage, but prime is at 8.25% it doesn't make any sense for a lender to offer 3%
Most of my fix and flip lenders are coming in around 10.99% - 12% (11.21% APR - 12.47% APR)
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
3y
Quote from @Romtein Rostami:

Seems like beating a dead horse at this stage, but prime is at 8.25% it doesn't make any sense for a lender to offer 3%
Most of my fix and flip lenders are coming in around 10.99% - 12% (11.21% APR - 12.47% APR)

and CA has some of the lowest HML rates in the nation if not the lowest.
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1 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
3y
Quote from @Account Closed:

I have some experience in the lending industry. Until they get you an official initial loan (estimate) disclosure form detailing everything, you are just being quoted numbers. Every lender does that to make sure they can get a client.

loan estimates in writing from a HML are NOT binding..
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