Private Lenders and "Alligator Arms"
We're seeing this happen more often as more people are becoming "Private Lenders". I own a mortgage company that, among other things, lends to investors. For the deals below $75K, we tend to refer them out to smaller private lenders. We usually go to the "known" private lenders first, but it seems we're getting contacted by more "private lenders" that took a course at the Holiday Inn last weekend from a guru that's never set foot in a lending job before. They agree to fund a deal then, when it comes time to fund, they ghost us. We, for one, are done referring to private lenders unless we know them or we see the money ready to go. Just a comment geared toward newer private lenders...you can't commit funds to a project unless you're truly ready to follow through. To our regular sources...I thank you...you seem to be rarer and rarer these days.
We know how to handle it and I'm not seeking advice, I am just ranting. I, for one, am over it. I know we have several regular commenters that are in a similar business to us on here that I feel we've become kindred spirits and I am sure will pile in.
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Sounds like it's not just me noticing that there seems to be a ton of "private lenders" everywhere who are just trying to re-broker every deal they can get their hands on. The number of deals that I see with 2-5 brokers in the chain is growing by the week. It's especially shocking when there are 4-5 hands in the pot and they all want 2 points each.