Hard money and private money questions.

[Kam Lau]

New investor here. I’m looking for some advice about screening hard money and private money lenders. What are considered some fair terms and what are some things to look for and avoid? Where’s a good placeto find reputable lenders? I appreciate any and all input. Thank you.

[Zachary Richards]

Hey @Kam Lau. I'm a private lender (I lend my own money), and the single biggest red flag is being asked to pay any up front fees. Most reputable lenders only charge fees at the closing table. One exception is some title companies require a small deposit for them to start the title work, or perhaps an appraisal (I do not require them).

Any fees you pay up front should be payable to a third party only. 

Also see if they have references from other borrowers or have done prior deals. Some borrowers I know have their lender ditch them at the last minute, and although it's not a scam, it can cause you to have to scramble to find another lender or lose the deal.