BEWARE OF LENDER SCAMS
www.fullcirclehousing.com
Private money lender scams are EVERYWHERE. Here's a few pointers for my friends who invest in businesses or real estate and intend to use private money funding for those deals...
RED FLAGS
1.) Private money is EVERYWHERE, doctors, lawyers, business people who want to grow their money but don't have time to run another company and hate their stock returns. LOL We use private money to fund real estate acquisitions and pay our private lenders 8-12% on their money which is far higher than they're getting in the 401K/IRA. Private money lenders understand that's about the going rate and anyone who offers you lower than 6% is usually a scam. I get 5-6 people in my inbox DAILY offering 5%, they get blocked. I don't know them, they don't know me and they haven't evaluated a deal for risk so how are they going to offer rates on imaginary deals?
2.) Private lenders want SECURITY. Our private money lenders ask for and receive a mortgage and lien on the properties we do securing them with real collateral. If for some reason they don't get paid, they get the property. Anyone who comes to you offering to lend large sums of money without knowing you and without any form of collateral is scamming you. Wait for the other shoe to drop, they'll want money before closing.
3.) Private money lenders DO NOT HAVE TO MARKET FOR DEALS. Just like money is everywhere, deals are everywhere as well. If a private money lender is marketing to you, they're probably a scam.
4.) Private money lenders do not ask for money up front (with the exception of perhaps an appraisal & you can pay the appraiser directly and usually select the appraiser yourself). All money changes hands at the closing table. If they ask for it before, you're probably about to get robbed.
The best private money lending relationships come from your friends and family that you already have relationships with or people that you know via social media that approach you after they learn that you offer private money lending opportunities. You both secure yourself, you by having control over the deal and them by having security through real estate liens and mortgages and good private money relationships will last for many, many years.
www.fullcirclehousing.com
www.fullcirclehousing.com
Private money lender scams are EVERYWHERE. Here's a few pointers for my friends who invest in businesses or real estate and intend to use private money funding for those deals...
RED FLAGS
1.) Private money is EVERYWHERE, doctors, lawyers, business people who want to grow their money but don't have time to run another company and hate their stock returns. LOL We use private money to fund real estate acquisitions and pay our private lenders 8-12% on their money which is far higher than they're getting in the 401K/IRA. Private money lenders understand that's about the going rate and anyone who offers you lower than 6% is usually a scam. I get 5-6 people in my inbox DAILY offering 5%, they get blocked. I don't know them, they don't know me and they haven't evaluated a deal for risk so how are they going to offer rates on imaginary deals?
2.) Private lenders want SECURITY. Our private money lenders ask for and receive a mortgage and lien on the properties we do securing them with real collateral. If for some reason they don't get paid, they get the property. Anyone who comes to you offering to lend large sums of money without knowing you and without any form of collateral is scamming you. Wait for the other shoe to drop, they'll want money before closing.
3.) Private money lenders DO NOT HAVE TO MARKET FOR DEALS. Just like money is everywhere, deals are everywhere as well. If a private money lender is marketing to you, they're probably a scam.
4.) Private money lenders do not ask for money up front (with the exception of perhaps an appraisal & you can pay the appraiser directly and usually select the appraiser yourself). All money changes hands at the closing table. If they ask for it before, you're probably about to get robbed.
The best private money lending relationships come from your friends and family that you already have relationships with or people that you know via social media that approach you after they learn that you offer private money lending opportunities. You both secure yourself, you by having control over the deal and them by having security through real estate liens and mortgages and good private money relationships will last for many, many years.
www.fullcirclehousing.com
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