Hard Money Lenders- Who Is Fake And Who Is Legitimate? Please Share Experiences!
I am doing research into hard money lenders to try and find creative ways to begin and work on my first deal. It’s hard for me to be able to see what lenders are well known nightmares vs. what private lenders might actually be legitimate. Can anyone please weigh in on this with personal experience? Who have you worked with that you would recommend? Who is an absolute nightmare that should be noted to stay away from? I’m brand new at this and gathering whatever information I can. Thank you!
[{"id": "isjc87w", "text": "I would start with local real estate attorneys and get their recommendations.  They do the closings, they see the foreclosures, they see the successes and the failures.", "replies": [{"id": "isjmq9o", "text": "I was going to say the same. This is really the way to go OP.", "replies": [], "depth": 2}, {"id": "ism7wry", "text": "My main observation is that some lenders plan to make money on origination fees and prepayment penalties. And foreclosing. \n\nOther hard lenders are truly trying to lend at competitive overall cost of capital for non traditional situations. \n\nOP, as long as you can calculate and compare overall cost of capital, you\u2019ll be fine.", "replies": [], "depth": 2}, {"id": "isna699", "text": "This is the right answer. I keep a list of lenders I like working with and always try and steer clients to good lenders. I do this mostly my sake as the person who has to read the loan documents and close the deal. Working with the wrong lender drags the process out and costs the borrower thousands in preparation costs/legal fees. \n\nDon\u2019t take or give hard money without having a lawyer read the documents. Too many people call me after the fact and ask me to change signed loan documents.", "replies": [], "depth": 2}], "depth": 1}, {"id": "isjtcoh", "text": "Join the local REIA to get an idea who people have worked with.", "replies": [{"id": "isl6sey", "text": "This is probably the best approach to talk to local REIA, second best is to work with an independent 3rd party broker.\n\nWith rates going up there are hard money lenders either retrading borrowers or leaving them hanging after a borrow has paid for an appraisal.\n\nA local REIA will give you insight into lenders used in the past that may have much different terms now.\n\nA broker will have a better idea of what are current terms, but even then you might get lied to by a broker just trying to get your business.", "replies": [], "depth": 2}], "depth": 1}, {"id": "isjwjwi", "text": "Dm me", "replies": [], "depth": 1}, {"id": "isjxii5", "text": "I can tell you who is well known to SUCK, take peoples' money and run etc.\n\nI've been loan brokering since 1988. I have a stable of proven lenders that'll do a quick bridge.\n\nI'm not sure if I can post the names of the shit lenders here.\n\nPM me.", "replies": [], "depth": 1}, {"id": "isk1tkf", "text": "I'm a lender and make over 35% consistently by reinvesting profits on short term loans. I recently figured out how to make over 200% reliably.\n\nThink really hard about becoming a lender.", "replies": [], "depth": 1}, {"id": "isk3jaw", "text": "Not for the faint of heart.\n\nOne of my favorite hard money lenders is still serving prison time for allegedly running a Ponzi scheme. I always believed his only fault was over leveraging, but that's  not how the jury saw it. \n\nOh, and because it was deemed a Ponzi scheme, the follow up was a claw back. So the investors instead of getting any of their money back, had to pay back their profits since the beginning of their association with the lender, which for some of them was more than 20 years. \n\nFor those of you thinking of buying in on high interest promises, just remember nobody pays 18% unless there is real and significant RISK. \n\nThis is a true story. It ruined him, his family, his friends and anyone who touched it. Beware, no such thing as easy money.", "replies": [], "depth": 1}, {"id": "iskjgpp", "text": "Call title agents. They know who funds deals.", "replies": [], "depth": 1}, {"id": "iskyw2x", "text": "Get to know them as people, you will need the personality to be there when you enter private money.", "replies": [], "depth": 1}, {"id": "isleajl", "text": "Im legit. Hit me up! I have a 20 million dollar line.", "replies": [], "depth": 1}, {"id": "islef3v", "text": "location matters.\n\n&amp;#x200B;\n\nif you dm me i can give you a name for someone in the southeast", "replies": [{"id": "islg1kp", "text": "Southeast of what?", "replies": [{"id": "islky5h", "text": "usa", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "isltl67", "text": "What kind of deals are you trying to do?", "replies": [], "depth": 1}, {"id": "isme9ir", "text": "Get a mortgage broker but if not here are some good questions:\n\nHow many closing have you had in the last 90-120 days?\nWhat was the avg deal size?\nWhere does your capital come from? ONLY answer that you should receive is \u201cdiscretionary\u201d CapitAl. You want to make sure you are deal with a direct lender. Many are just more intermediary\u2019s to the actual source of the loan often making things confusing. \nDo you have references?", "replies": [], "depth": 1}, {"id": "isosic6", "text": "Speak to attorneys and local investors. Try to find local people with IRA money; they usually will charge lower fees, if any.", "replies": [{"id": "isqulm9", "text": "Do you know how to discern that? Locals with IRA?", "replies": [{"id": "isswo7k", "text": "Yes, you can place local ads on Craigslist or in the newspaper (looking for older people). Last time a student of mine did it; they found 2 people; 1 was willing to do a 10+ year term.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]