Be Careful Who You Source as a Hard Money Lender

Everyone is a Hard Money Lender?

 

With so many mortgage professionals finding they can’t make money on traditional loans, many of them are flooding into the private money lending industry and claiming to be a hard money lender. Most of these brokers don’t even have real lenders in their back pocket and many times will just refer your loans to another broker. A huge waste of time!

Then there’s the problem of the upfront fees. When you think you’ve actually found a real hard money lender, you will sometimes get slapped with an upfront fee. While some real lenders do charge upfront fees for inspections and appraisals, there are some fake lenders who pose as lenders and don’t really fund loans. These fake lenders just charge upfront fees to make money, versus making loans. This can be frustrating for borrowers who are eager to get a loan funded, only to find out they’ve been wasting their time with a fake lender.

 

Track Record and Recommendations are Important

When searching for a hard money lender, start with a reputable broker with a proven track record and with a variety of creative lenders in his/her back pocket. There’s a new hard money lender every day who pops up on any street corner. Use a seasoned hard money broker who has the best lenders on speed dial. Some of these hard money lenders don’t even use email, as many of them are just individuals with money. A seasoned hard money broker can get you the lowest cost, most creative financing out there and can negotiate with a lender to get you the exact financing you may require for a particular transaction.

If you’ve been searching for a hard money lender it can be a daunting and frustrating task. Navigate these uncharted waters with a seasoned, experienced hard money broker. Many people will tell you to skip the broker and go directly to the lender. But with the problems listed above, you are taking a risk of being scammed, or worse, getting the run around rather than getting the financing you seek.

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