How to determine if a Private Lender is legit

Question

Hi all! I am a newbie to the industry and very reluctant when it comes to disclosing personal information. I have been looking for financing options for investments properties. I came across one "company" that sounded too good. So I went into investigation mood... turned out to be a scam. So, I've come across a PML. I definitely don't want to offend anyone that is legit, but how do I go about making sure everything is on the "up and up" when dealing get with PML's who are not "companies"? Need help figuring this one out, in the event a conventional loan/ bank is not going to work out for me.

Thanks for any and all tips/advice!

Troy Gandee · Answer

@Alisha Magwood You should definitely reach out to @Russ Scheider for more information about this. He's very resourceful and knows just about everyone in the area.

Alisha Magwood · Answer

Thanks a bunch! Yea, I haven't been out asking for lenders or money per say... Just been doing a little research and site jumping. Came across sites and blogs saying they provide loans for real estate start up/property purchase " Private Money Lender" Hard Cash Lender" etc... Was just wondering if that was the way of the industry. But, I'm finding to be more safe I'd be better off with word of mouth, references, and industry meetings. Thanks! One thing for sure, I won't be offering up any personal info without knowing if someone is legit! Which is why I decided to ask my BP peeps--- this site has been awesome! @Rick Pozos @Troy Gandee @Russ Scheider Account Closed-- thanks for your input. I will be following up!

Rick Pozos · Answer

YOu have to go to your local real estate investor associations. Also, go on recommendations of others. There will be plenty of people there who can vouch for someone who claims to be a lender. When you do some networking and meet some people in the business, lenders will be plentiful. Only use people that you know personally. Dont put yourself out there saying, "I need to borrow some money". All the crazies will start sending you emails and PMs.

Alisha Magwood · Answer

Thanks Don C.

Don C. · Answer

Alisha,

I'm a new private money lender (PML) One of the easiest ways to make sure your not dealing with a scammer is to ensure a legit attorney or third party trust is part of the deal, most PML will want to know details of your deal ( Renovation plan, Marketing plan, Exit plan). Feel free to contact me

Anthony Ford · Answer

not everyone has that option @ Tim Lindstrom. Unfortunately.

Tim Lindstrom · Answer

I always thought a private lender is someone you already have a relationship with (friend, family, co-worker, etc...).  If so,  you should already know if they are legit.  Am I wrong?

How to determine if a Private Lender is legit

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