Should I be skeptical
As a new investor I am so excited when I see the opportunity to acquire a new home. However, this excitement is one of the reasons why we newbies make mistakes. My husband and I are looking to get our feet wet with every type of funding out there. We want to see what works for us and exactly how its done. Personal loans, cash and bank financing is done. We are solid on knowing most of the ins and outs. Now we are actively searching for private lenders as we found a home that is in the perfect location, generates excellent cash flow and tenant is locked in for over a year.
Recently I signed up on Connected Investors. I put in my funding request and now I have all type of scam artists contacting me. I did connect with someone in my area so I don't want to deactivate my account just yet. I also found two lenders that, in my opinion, seem very legit. One of them I actually talked with on the phone as well as their partner. They get their money from a hedge fund. The do 5 year fixed and then 30 year amortized. We can keep them or allowed to refinance. They do between 5 to 8% depending on credit score. up to 90% LTV which actually is not up to them but the investor they are getting the money from. They do their own due diligence. Appraisal fee and processing fee is due upfront. An inspection may or may not be needed depending on who the lender is. They also charge 2-4 points.
The home we put an offer on is a short sale so technically the closing is not going to be anytime soon. So I have a little time but getting a lender we can work with on a regular basis is something we want to find ASAP. I don't want my excitement to blind me and no matter how many posts I read I cant tell if its a good thing or bad thing. Talking to them on the phone eased my mind a little but I feel like I need to know every detail about these people. I hear stories of people doing deals with people they barely know and everything goes smooth. But the horror stories are so bad I cant get them out my head.
Im also a Private Investigator so I can easily run a background check but I don't have much information to go on unless I ask for it. Am I going to far with wanting to run a background check on the people I am doing business with? I am not trying to scare off potential lenders but at the same time I figure that if they have nothing to hide they are okay with it. I wouldn't be as skeptical if they were in my area and could grab a lunch and get to know them personally. But the fact they are miles away leaves me with some doubt. They are in Illinois. They have a website with the phone number and physical address. They seem to have other businesses as well linked to REI. I can't find much but the main guy has been around for some years as I have seen posts on other REI sites from like 2008 or earlier.
Any suggestions would help. My nerves are kicking in.