Updated over 6 years ago on . Most recent reply
About to fund my first (recent) hard money deal, need advice
Hello - I am working on getting back into real estate/investing, and I have a 6 figure short term hard money loan I want to fund for a developer who needs extra capital for some unforeseen problems with prepping the dirt for development. Lot has been subdivided for 20+ units new construction SFR, grading done. Just waiting on utilities, then vertical construction can start. I have met the principal, seen some of his other projects, walked the actual lot, etc. My first concern is protecting myself from fraud, which I have dealt with in the past.
Everything seems good, but I just want to cover all of my bases and protect myself, as I have been screwed (badly) in the past, after getting too comfortable funding deals.
Is it normal to ask for a 3rd party escrow/title report/title insurance for a private hard money deal? I just want to make sure I am in the right lien position with no surprises, and that I am getting concurrent recording/funding without worry.
For those of you that lend, what are the typical questions and details you cover and obtain as part of your due diligence, in both for fraud prevention, and for analyzing the deal?
All advice appreciated.