Fake Hard Money Lender?

6 Replies

Hi there, I was contacted by a hard money lender via LinkedIn shortly after my first post on BP forums. I thought this to be strange someone would randomly reach out and ask if I need funding, however given the networking aspect of RE investing, I am not too surprised. I was curious if there is anyone who has had a similar experience? I want to reach out and discuss funding but am worried it may be a fake profile with a fake company and is some form of scam. However, the gentleman has over 500+ connections on LinkedIn which would also make me feel like it may be legit. Just curious about some experienced investors' inputs on situations such as this?

Thanks in advance.

Originally posted by @Mitchell Barna :

Hi there, I was contacted by a hard money lender via LinkedIn shortly after my first post on BP forums. I thought this to be strange someone would randomly reach out and ask if I need funding, however given the networking aspect of RE investing, I am not too surprised. I was curious if there is anyone who has had a similar experience? I want to reach out and discuss funding but am worried it may be a fake profile with a fake company and is some form of scam. However, the gentleman has over 500+ connections on LinkedIn which would also make me feel like it may be legit. Just curious about some experienced investors' inputs on situations such as this?

Thanks in advance.

There are a lot of scam lenders, they ask for fees before the funding which somehow never happens. I also mark those message as spam myself, i dont believe that sort of solicitation is allowed here. i would avoid anyone sending those sorts of messages here. 

500 Connections on LinkedIn is not the same as 500 satisfied borrowers, @Mitchell Barna . Rest assured, the latter number is probably zero.

Legitimate lenders are not going to solicit you from LinkedIn, Craigslist, Facebook, Connected Investors, or the like. Even if they claim to represent a lender you can confirm is legitimate, you don’t know that they even work for the company. Company identity theft is common.

This is a business based on personal relationships, Mitchell. This means meeting your lenders face-to-face (or zoom-to-zoom lately). Real estate clubs are the best way to find real lenders. Call your local REI club owners and ask which lenders regularly attend(ed) their club and who have the best reputations. These are the lenders you want to call with a list of informed questions.

Sorry, it’s not your lucky day.

Also, for what it’s worth, and this is state-specific, but not all private/hard money lenders are required to hold an NMLS number. These are required for consumer purpose loans. Most private/hard money lenders only make business purpose loans. California, for example, does not require an NMLS registration for lenders who only make business purpose loans. Even as a borrower, you should know the rules in the state your property is located.

@Mitchell Barna as a lender myself I got reached out by a David Oak at Good Fund Lending. Just didn’t seem right how he was screening me and asking me to purchase a financial guarantee surety bond certificate. He also had 500+ contacts showing on his Linked In profile. Thanks for keeping us all more aware of different situations.

Thank you all for this information it was greatly helpful. I definitely do not think that was a legitimate solicit and I appreciate sharing the NMLS link with me. I am new to this and have my first property through seller financing, but haven't taken on any HMLs as of yet to fund deals. Good luck to all of you and hopefully I will gain some more experience and be able to help others just as you all have helped me!