Due Diligence Warning: Felipe Soares / RAW Equity Group LLC / RAW Acquisitions

[Carl Mcknight]

If you've been looking for a way to put your money to work without riding the ups and downs of the stock market, private lending probably caught your attention. The upside is real — consistent returns, real estate backed security, and deals you can actually see and touch. The downside is real too when a borrower decides your money is easier to default on than pay back.

How do low ethics borrowers find you? Well its a lot easier today, than it was in the past. Prior to social media, you would meet a prospective borrower at a networking event, maybe through a friend or family, maybe through various relationships, maybe someone in your town that had a great reputation of borrowing and paying back what they owed. Well that has changed with Social Media.  Social media and the internet have made it easier than ever for real estate investors — legitimate and otherwise — to build a polished online presence. A professional website, a LinkedIn profile with impressive credentials, an Instagram feed full of properties and success stories. It looks convincing because it is designed to look convincing.  

What you rarely see on their feed is the foreclosure filing at the county clerk's office, the lender who didn't get paid back, or the public record that tells a very different story than the highlight reel. Anyone can call themselves a fund manager, a flipper, or a real estate authority online. Very few of them are telling you to google their name plus the word 'foreclosure' before you wire them money, tell you to check their Secretary of State website to make sure their entity is still in good standing.

Check out the above URL for the foreclosure filing info on the above mentioned borrower. Then check out their social media links. What a person is doing and what they have done, are sometimes polar opposites. 

Do your homework before you write the check. Search public records. Verify every claim. And read posts like this one — because the investor who got burned before you is often the only one willing to tell you the truth."

[Doug Smith]

This is a good reminder of something that’s become more common as private lending has grown and moved online. A strong social media presence or polished branding can make someone look credible, but it doesn’t tell you how they behave when a deal hits friction. In credit, the real work has always happened behind the scenes, not on the highlight reel. Simple steps like checking public records, prior foreclosures, lien history, and entity status will usually tell you far more than testimonials or follower counts. That isn’t about assuming bad intent, it’s about removing blind spots before capital goes out the door. I’ve also found that marketing skill and operational discipline are very different things, and confusing the two is where lenders tend to get hurt. The lenders who last aren’t the most aggressive, they’re the most consistent in how they vet borrowers and structure deals. A repeatable diligence process matters more than any single deal or personality.