For years on this board I’ve written tirelessly about making sure you know who you are borrowing from. With the number of local real estate clubs, now well-attended by legitimate lenders, there’s no need to take a chance with online or out-of-town lenders in my view. This is a business built on relationships and we’ve put our money where our mouths are on that.

I’ve published our lending process in detail here a few times and it’s never really changed. From day one, my wife and my main focus has been to only loan to those we’ve personally met and gotten to know, like, and trust. This is the ultimate real estate cliché, but something that we swear by. If the two of us haven’t personally met you face-to-face, eyeball-to-eyeball, belly-to-belly, we will not loan to you (and we’ve never had employees representing us).

We normally don’t give a damn about your deal. If there are comps in the area that will support a sale, and the numbers work, they work. Our safety comes from lending to those with integrity who are expert at what they do. For these reasons, we only loan in Southern California and we’ve never had a website.

Wouldn’t you know, we recently received a call from an out-of-state investor who was scammed by our “company” having wired five figures (!!!) in up-front fees. It didn’t take him long to figure out it really wasn’t us who scammed him but someone who created a very professional looking website using our exact company name and our personal info. We actually had a nice conversation and I felt terrible for him. Since then, a number of victims and individuals who were almost victims have contacted me.

It appears some scoundrel created a very professional looking website with our company name, what’s probably a Google Voice number, and legitimate info easily obtained from public records that he can point to. I’m told he answers the phone using my real name (Jeff Smallowitz)!!! He’s targeting others on BP, and possibly elsewhere, who say they are looking for real estate money.

Please watch yourself, set some rules, and use common sense.

Lending docs, licensing, and LLCs are extremely transparent and can be validated online in minutes. Because you can verify that these are legit doesn’t mean you are speaking to a real company representative. And, careful wiring money to an out-of-state entity with an account name that doesn’t match our company name.

Since this is ongoing, I will not share the actions we are taking at this point. Rest assured we do not solicit our loans online. Nor do we ever ask for up-front money. Ever. Also, we are not planning on expanding out-ot-state. If you receive communications from anyone representing me or our company, and you didn’t meet us in-person, it’s a scam. Period. Full stop. Do not respond to anyone doing this.

Don’t be a motivated borrower. No matter how convincing, NEVER SEND ANY MONEY UP-FRONT OR ANY PERSONAL INFO TO ANYONE YOU DON’T PERSONALLY KNOW AND TRUST. That’s the easiest way to avoid this fraud. All money should transfer through a neutral party like escrow, title, or a closing attorney, at closing. Accept no excuses.

Would you please send me a PM if you’ve been contacted by anyone using my name or company name and whether you’ve been scammed or not. It could help end this. Thank you.