Hard money loans scam

4 Replies

Hi Everyone.

I am looking to purchase my 1st rental with hats money just to close quickly (off market deal) my email is flooded with private and hard money lenders. I have 2 questions 1)How do I know which are legit? 2) does anyone know if I have a few lenders pull my credit will it show as 1 or many pulls negatively affecting my credit score? Thanks

Hi Naftali. Legit lenders do not charge any money up front BUT the appraisal. Check for reviews or other industry professionals to vet for one. BP is a good source. If they have a legit website usually they will show more details, history and ways to connect. 
From my experience, download the credit score once and send as many times to whoever is asking. One time shouldn't dramatically effect the scoring. Good luck ! 

Have you check in the marketplace? I would start there as well as checking with other investors in your area to see which ones they prefer to use. I would also keep in mind that the closing costs if you are rolling in rehab costs can be pretty expensive. You will also need to have cash or credit reserves to start your rehab before you can request a reimbursement period. A lot of newbies aren't aware of this and can get into trouble. If you are just starting out, then also know that your estimates are going to almost always come in too low. I have seen several opportunities for investors open up because another investor wasn't prepared. You can definitely accomplish this, just make sure to build a good plan.

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@Naftali Green the most tried and true method to make sure you don't work with scammers is by getting recommendations from other real estate investors.  If they have worked with someone, and recommend them, then you know how it will go.  Networking with other real estate investors is a critical piece of being successful in this industry.  And you have already started networking by posting here!  But I would recommend with networking for something like this in the market you are looking to invest in. Bigger Pockets has some great state forums and usually there are good locals that monitor those. Try posting in that state forum. Also, try some local real estate meetup groups. Meetup.com is a good resource for those but some of the groups will also post here on Bigger Pockets Marketplace too. Even facebook might have some good local groups for you. But post locally for this. That’s the best bet.

Always check them out online first. Every time a lender pulls credit you will get a hit. No lender should be pulling credit unless you agree to their terms first, based on what you tell them on your credit. If  the actual score is different than what you said then we just to adjust terms.