Is this lender legitimate? Something seems off

28 Replies

Hi BP!

I'm looking for a hard money lender for a 6-unit apartment complex. My agent gave me the name of a lender she found on BP, Joshua H. Brown. She warned me that she did not know him and had never worked with him before, so this wasn't necessarily a recommendation, just a potential option to check out. His account is closed on BP. He seems to have VERY little criteria for lending. He answers my questions with very little detail, requiring me to really dig for answers. I asked him if he could somehow verify his legitimacy through references or other means, and he said he could e-mail me some references along with his business license. Is that enough? What else should I ask from him? I'm trying to find other lenders, but I'm having a tough time doing so. 

TIA!

Trust your intuition and gut instinct. Just from the limited info provided I know I wouldn't work with them.

Originally posted by @Nicole Heasley :

Hi BP!

I'm looking for a hard money lender for a 6-unit apartment complex. My agent gave me the name of a lender she found on BP, Joshua H. Brown. She warned me that she did not know him and had never worked with him before, so this wasn't necessarily a recommendation, just a potential option to check out. His account is closed on BP. He seems to have VERY little criteria for lending. He answers my questions with very little detail, requiring me to really dig for answers. I asked him if he could somehow verify his legitimacy through references or other means, and he said he could e-mail me some references along with his business license. Is that enough? What else should I ask from him? I'm trying to find other lenders, but I'm having a tough time doing so. 

TIA!

 https://www.scamwarners.com/forum/viewtopic.php?f=...

Not sure if this is your person, but certainly would scare me.  If you're looking for a hard money lender for a  unit, there is a lot of detailed information you'll need to give.  If he's just asking for cursory information, I would run.

Best of luck

Stephanie

Anybody can get a business license - that means nothing. He should have a license that allows him to be a lender in your particular state. Does he have a website? Does his company have lots of hits when googling them?

@Nicole Heasley  

Now you have to figure out if the references he gave you are legitimate or figments of his imagination. 

Questions that I'd have about the references: 

-Are they customers who have closed loans with him or associates? 

-Do they actually own property where they say they do? County records can tell you that. 

-Does their memory of his fees and process match up with what he has told you?

Other ways to vet him, what tile and escrow company he uses. Don't be afraid to do a background check if he is truly your only option, which I don't think is the case.

Lenders DO NOT GIVE OUT REFERRALS of clients that's privileged information.  

keep in mind fake lenders are the new Nigerian prince scam of real estate

there is no private money that is less than about 10% apr.. bottom line.

@Nicole Heasley   If you're looking for a lender for a 6 unit complex, I would bypass this guy and just reach to smaller local banks in your area, and look for the commercial lending department.  Someone who can meet with in person and who knows the area. 

 I have a 6 unit complex that was unlivable, I reached out to national lenders and no one would touch it, or they would start the process and then cancel it once they sent an inspector out.  I then stumbled upon a local bank, met, they said they knew the building and the history of it, and would advance purchase + rehab funds to get it all fixed up and rented out. Worked great, portfolio lender and they still service the loan to this day.

Good luck!

- Tom

@Tom S. I have a list of local banks saved that I can start contacting.

@Jason D. You would think that, but finding one that will work with me is proving to be WAY more challenging than I thought it would. 

Originally posted by @Nicole Heasley :

@Tarik Turner I'm looking!

 small balance loans are difficult for lenders ..  a lender need to make 4 to 5k per file to keep the doors open.. either through junk fees and or points and junk fee's  the interest normally goes to the investor not the lender.. there maybe a little delta on the interest but not much .. 

Having made a career the last 20 years in low balance deals.. you simply cannot price them like a normal loan.. U just need a set fee.

just like when realtors or wholesaler want to sell low value assets they put a set fee on it.

so take a 40k loan how can anyone stay in business at 2 points and few set up fee.s  that not much more than 1k.. and if the loan went bad you would be out a ton of money..   So figure 4 to 5k is what you need to offer a lender up front and an interest rate for a low balance loan.. or just get friends to do it or put them on a credit card.

@Jay Hinrichs I probably need to deal with someone local. A NICE house around here goes for $70k. You don't have a choice but to deal with small loans as a lender in this area. 

Originally posted by @Nicole Heasley :

@Jay Hinrichs I probably need to deal with someone local. A NICE house around here goes for $70k. You don't have a choice but to deal with small loans as a lender in this area. 

 Yup go to a local credit union or community bank.. a bank that is say less than 3 billion.. and preferably ones that are like 500 million..

their charters are written to serve the immediate community... forget large national or semi national.. 

and be very leery of broker chains and those that promise things and want ANY up front money.

Originally posted by @Jay Hinrichs :

Lenders DO NOT GIVE OUT REFERRALS of clients that's privileged information.  

I am so glad to hear someone say this! Whenever I am asked for a referral, I happily point them to links of people writing positive reviews about our company on BP, Facebook, Google, etc., but I would never give someone my clients' name or information. 

In fact, I may start calling my competition asking for referrals and see if they'll give me their client list ;)