Recommended course of action to collect on hard money loan

[Arthur Royale]

Hello, I entered into a contractual relationship with an Atlanta-based company I met on these forums to loan them money to do two Atlanta flips. The deadlines came and went and they didn't pay me back my capital or profit. I got a default judgement against them and now I need to collect.

I've asked for a local lawyer recommendation in the Georgia forum but I'm also trying to understand the best course of action for this type of situation. Someone recommended starting with an asset check. Has anyone encountered this situation before and any best practices I should follow?

[Patricia Steiner]

Smart move on getting the Default Judgement.  And, now it's time to get your money back:  

1.  Why didn't they pay?  Was it fraud, cash flow, stupidity?  This will help you decide what course to take first - and take it quickly.  

2.  Did they do the flips?  Has anyone visited the properties?  What liens are on those properties?  Before I hired a local attorney, I would spend $200 to have a security company visit the properties, take photos, and record activity at the sites (license plates of parked cars, contractors, etc). I would also have the company drive-by their offices/homes and record what and who is there.  

2.  Look back at the information they gave you to qualify for the loan...what assets did they say they had at that time?  Foreclosure is a long and costly process - but you would be amazed just how quickly people surface when you attach and drain their checking account or file liens on their prized cars/trucks (walking is great when you want to, not so much when you have no other choice).

3.  Be discreet in doing the asset check because if they didn't pay you, they probably haven't paid anyone else either and you want to get your money back before the herd comes charging.  Find out who they've paid and not by calling for trade references (from contractor trucks at site or offices).

4.  I recommend hiring the attorney after you know the status of the properties, identified assets, and know the whereabouts of the defaulters.  You'll save money and time - and  have a better idea of how to proceed.

I hate that you're in this situation but as a former banker and investor - May the force be with you...