How do we protect our name with PRIVATE MONEY??

How do we protect our name with PRIVATE MONEY??

So I found a guy on craigslist listing that he has funds available for rehabs and flips. I emailed him and said I would like more info and now I am waiting for him to call me back...

Question is how do we know these people are for real?
What questions do we need to ask?
I just want to make sure I do all the right precautions into making sure they are not a fake and trying to scam me!!!



You might want to call the local BBB in the city that this HML is located in and see if there are any complaints filed. Maybe he can give you some references of people who have used his funds...but I guess that can be forged. Just call the BBB.

Here are the questions you need to ask when dealing with Hard Money Lenders
1. How many points do you charge?

2. What is your interest rate?

3. Is it 6 or 12 month loan?

4. Is it amortized over 30 years?

5. Is it an interest only loan?

6. What percentage of the after repair value do you loan?

7. How much money do I have to bring to the closing table?

8. What is the minimum credit score I need to have?

9. Is there a prepayment penalty?

10. Will you extend the loan if the rehab is not complete after the balloon date?

11. If they do, do you charge to extend the loan? _____ How much? ________

12. Are you a broker or do you provide the loans yourself?

13. How long does it take to close the deal?

14. Who pays for the inspector who comes out to inspect the property?

15. Who takes care of the repair list?

16. Do you honor assignment of contract fees?

17. If they do, do you limit the amount of assigning fees you can charge
per deal?

If they do NOT honor assignment fees then move on and find a new lender. To become a successful wholesaler, you need lenders that will allow you to make an assignment fee so that you can make money.
By: Kenny Rushing





ok but if they are not a business?? They are just a private person that wants to invest there money!!! They wouldn't be in the BBB right?


They wouldn't be in the BBB. But you can ask for references from other investors they've given money to. Do your due diligence, make sure you know who you're doing business with in every aspect of your business. It's just good sense! Eye-wink

God bless,


Cool Elena Cool
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."


Remember the guy in Buffalo who said he would give our downpayment back right after closing?? Remember the alarm that went off with you and me. Check this guy out my friend. like Elena said, get some references. Watch your back, there are sharks out there. My best to you....Jan


Jan's right on the money here, no pun intended... Well, maybe one little one. LOL! If you don't get references then chances are this guys' one of those sharks. They should have plenty of good references if they're sound business people that are lending money. If not, then move on to the next one, because you don't want to be their 'first' if you know what I mean. ;D


Cool Elena Cool
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."


Also Google his name and see what comes up. You can find out a lot of interesting things about people by Googling.




Very good!!

All very good info here guys!! I'll keep all that in mind and I will let you know what happens!!


More Info

You can also ask for proof of funds from them and get an example of the note they would use. Any money not used for purchasing the property (i.e. fix up) should be set up in an escrow account as well. The escrow account would have the escrow instruction which would define how the money is paid out. Also, do not pay any money up front before closing at a proper closing / title company...ever.

Most of the time it will be hard for a lender such as this to be a shark considering they are the ones giving the money. It is good to investigate them and find out more about them but worst case scenario would be that they take the house from you when you tell them about it or they raise their interest rate and points at closing.

You can protect yourself from this by having them sign a non-circumvent agreement and putting the property under contract so they cannot get the house from you and if you see higher interest rates and points drop them and find another lender.


If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125