Is my private lender legittimate

8 Replies

I am new to the investment side but have been rehabing for ten years. I have my money tied up in a purchase that I have been in too long due to my appendix and needed time to recover when it ruptured.

Now back and fully recoved from the 3 surgeries. I am faced with bad credit . My best option may be private lenders but as a short test of the water revieled , those sources can be sketchy and a real trap for the newbies like myself. 

I am hoping for a source for vetting or otherwise determining if a private lender is legitimate.

Thanks for being available for this big step

Richard Murray

Originally posted by @Richard Murray :

I am new to the investment side but have been rehabing for ten years. I have my money tied up in a purchase that I have been in too long due to my appendix and needed time to recover when it ruptured.

Now back and fully recoved from the 3 surgeries. I am faced with bad credit . My best option may be private lenders but as a short test of the water revieled , those sources can be sketchy and a real trap for the newbies like myself. 

I am hoping for a source for vetting or otherwise determining if a private lender is legitimate.

Thanks for being available for this big step

Richard Murray

Sounds like you are meaning Hard Money Lender. Some are good, some are bad, all are expensive. Think in terms of 65% to 75% LTV, high points, high interest and if you miss a payment foreclosure. A Private Lender (They way I use the term) is a dentist, doctor or businessman that will lend from their pension account. Huge difference in costs and tolerance. I'd shy away from Hard Money Lenders and look for someone who has a pension, 401(k) or IRA that wants to make a good return. Hard Money is last resort IMHO.

A private lender is a person and you vet in person by assessing your relationship with them and common friendships.  Maybe check them out on social media (i.e. Facebook, LinkedIn, etc).

A hard money lender is a company whose main business is lending and you vet them online by way of Google or searching for their name on BiggerPockets.  Keep in mind that a private lender isn't always guaranteed to have better terms than hard money, especially if you find them on BP or at real estate clubs.

I know of a few lenders who will lend on any credit (even a 400 FICO), but they only lend in certain areas.  What state are you looking to buy in?

Originally posted by @Richard Murray :

I am new to the investment side but have been rehabing for ten years. I have my money tied up in a purchase that I have been in too long due to my appendix and needed time to recover when it ruptured.

Now back and fully recoved from the 3 surgeries. I am faced with bad credit . My best option may be private lenders but as a short test of the water revieled , those sources can be sketchy and a real trap for the newbies like myself. 

I am hoping for a source for vetting or otherwise determining if a private lender is legitimate.

Thanks for being available for this big step

Richard Murray

 Not sure if this is applicable to you, but FYI the mortgage industry uses a mortgage-specific FICO algorithm. This mortgage-specific FICO algorithm doesn't treat late medical payments nearly as harshly as the algorithms used by credit karma, your discover card, car lenders, or basically any non-mortgage FICO algorithm. 

Thank you Chris, and I must admit that I was not aware that medical bills were treated differently . sadly, I lost everything , house, truck, and had to file BR in chapter seven which is discharged but being self employed puts me at thevbottom of the food chain for now.

I want to thank very bodybwho responded and I would to avoid being out of line by talking as if I am asking for a loan. If I picked the wrong location to post my question about verifying a lender, I am sorry but I am not familiar with the subtleties of each location and promiss to pay closer attention in the future. 

I wanted to address Tom concerning " why not sell" . I am having an issue with plumbing below the slab in this house that I have on the market. The house is updated and ready to go but every time they land a buyer on the house , they jump when told we need to open it up for repairs. In the middle of the living room foor. 

We know its a common job and not a bigvdeal to a good plumber, but if they are choosing betwen two properties they tendcto slide overvto the property with the major project comming as soon as they close. 

I am just a small business , mysself and 3 men with better skill sets alowing me the time needed for prospecting amoung the the property management groups and investers needing a rehab crew. Small time really , so 5 to 10k is a big deal to me when I can no longer borrow money. 

Selling this house will help my credit and my self esteem. I have 2 of my guys that depend on me to make a comeback as well.  Im pretty sure they stayed because of my dad and I respect that. I shut up and listened to them for long time before being treated like an equal. These men are true Carpenters. The make your own tongue-n-groove type, so when they start eating lunch with you , it means something. 

So thats who we are and now is when my dad would say " stop whining salesman, we have the economy we've been waiting for, we can fix this ourselves and get on to the next one" 

Great input from the group. 

Originally posted by @Richard Murray :

I did want to let Nghi Le know I appreciate your share and messaged you . 

Mike from Arizona , that was it in a nut shell , and helps me in recognizing beforehand. 

 just don't get sucked into on line lenders that talk a good game then approve you to easily but they need 500.00 to move forward those are Nigerian prince scammers.. NONE are real.