Hard Money Loans for Real Estate Investors: Do’s, Don’t’s, Scams, and Shams

Hard Money Loans for Real Estate Investors:  Do’s, Don’t’s, Scams, and Shams

Hard Money Loans for Real Estate Investors: Do’s, Don’t’s, Scams, and Shams

With virtually anyone being able to claim they are a hard money or private money lender, how do you determine if you’re dealing with a scam or a legitimate lender?  This analysis will help you quickly qualify a potential lender. a) References are the number one key to qualifying lenders, contractors, real estate agents, tenants, and other people in our industry. If you would agree that the best marketing is word of mouth, consider that it is also the absolute best way to avoid being scammed.  The major players in our market have multiple references and happy customers to back them up.  I apply this logic to everyone I hire/do business with.  If I’ve never heard of you, I’m taking an unnecessary risk and I owe it to myself to conduct extraordinary due diligence before I give you the green light.  There are too many honest vendors out there to choose from that can provide references.  Avoid the unnecessary risk and the trail of tears. b) Location of the lender should be considered. While there are big national hard money lenders out there that have multi-state footprints that can be good choices, the small out-of-state lenders should be avoided.  Real estate investing is a local game and you should network and know the local players anyway.  In Houston, all of the hard and private money that you could ever need is more than likely less than a 45 minute drive away.  There is no reason to give the time of day to some out-of-state small fish that no else has ever heard of. c) Competitive Interest Rates and Points...