Good Morning,

What are the ways to vet a private lender?  I put a posting in the marketplace and have had a number of private lenders contact me.  Some have more information available online than others and I'm wondering in what ways can I authenticate or vet a private lender.

One who approached me via email has scant information available online but quickly offered to fund my deal at what I thought was a very low interest rate. Something about it feels too good to be true.

Any thoughts on how to do background on a private lender?

Hello:

Personally, I think it's better to network with the lenders/borrowers BEFORE there is a deal.  Meet them at meetings/lunch/coffee; discuss deals; get to know them.

Bob

Hi @Bob Razler ,

Good advice. I'm just starting out so getting to know the right order of doing things as I go.  I'm located remotely so networking face to face is not an option at this stage unfortunately.

Hello @Josh Stack :  

I am just starting too.  I have done some lending and I am learning along with you!

Feel free to drop me a line.  I would be happy to chat about what I have learned so far!

Bob

you will find that most that answer you on BP marketplace are just due diligence pump and dump schemers offer rates too good to be true ( BIG RED FLAG) suck you into 500 bucks or so sent to them and never hear from them again.

Private lenders do not advertise generally speaking.. you want a HML.. they advertise are for real and you can trust them to fund if you have a for real deal.

@Josh Stack , low rates are a red flag. Unless you've done a ton of deals, you'll be paying high rates AND the lender's going to want to see you bring some money into the deal, too.

Read  Tips for Avoiding a Scam on BiggerPockets.

Originally posted by @Jay Hinrichs :

you will find that most that answer you on BP marketplace are just due diligence pump and dump schemers offer rates too good to be true ( BIG RED FLAG) suck you into 500 bucks or so sent to them and never hear from them again.

Private lenders do not advertise generally speaking.. you want a HML.. they advertise are for real and you can trust them to fund if you have a for real deal.

Agree with this. Private lenders aren't typically advertising. 

Aside from that, ask them for a title company or two that they closed deals with and call the title company to confirm.

Great content, lately I've been getting random emails from "lenders". They are very quick to do business with me even though they don't know my credentials or qualifications. They quickly tell me they can fund my deal then at the end of the correspondences after a few days of emails, they are ready for me to pay them $500. I think lending is turning into a scammers pond where people simply say they'll lend, with the intent on only collecting an upfront fee from us. Be careful as 100% of my PL's aren't on BP or even on line looking for REI's to do business with. They're more of a personal relationship.

@Kris Haskins   its just another version of the Nigerian prince scams.. run by those who tend to be foreigners.. you can tell by rusty English and unusual wording in sentences etc.   I coined it the pump and dump due diligence scheme

Hey Everyone, thanks for the input.

@Mindy Jensen , linking to that scam article is the most helpful advice, thanks for that.  It would be good if that post were more discoverable.