Private Money Lenders

[Mario Gamilo]

Hello again BP Professionals. 

thank you once more for the great responses on questions to info-hungry (new word) like me. 

I would like to know how do you verify somebody online that says they can finance your deal.  I got few emails back from the people at Goldmine Private Lenders saying that they are legit. i found out that some jump in and ask for upfront payment right away and i ignore them at once. Then some looks legit, they give some identification, company name and address that seems exist with upfront requirements but no fee. so maybe there are some that actually want to invest but HOW can we do a due diligence on them?

i did see a forum here at BP that GPL is real. i also agree that most try to exploit.

thank you again

[Jeff S.]

Originally posted by @Ned Carey:

I don't think you need to do much due diligence on them. They need to do it on you. You are getting money from them so your risk is low, their risk is high. 

You have already said you won't give them money up front, that would be your biggest concern.

I have to strongly disagree. Even if you don't give them money up front, which you should obviously never do, your risk can be huge. Much more valuable than up-front money, could be your personal information.

To check you out, most lenders will ask for a 1003 Uniform Residential Loan Application or equivalent, with all your bank info, date of birth, SSN, location of bank accounts and the associated account numbers. Here, a disreputable lender can easily steal your identity, possibly your money, or simply sell this information to someone who will.

A website like privatemoneygoldmine, which has been exposed in dozens of threads on this board, might rip you off for a few dollars until you figure it out. This is a shame, and perhaps you'll feel like an idiot, but you'll move on. The real danger is that few of these sites actually vet their advertisers and have no idea who they really are.

In these cases, you have no idea with whom you're dealing or even the country in which they reside. Would you normally provide invasive personal financial information to anyone anonymously on a website, because you paid to be a member?

Up front fees aside, this is a strong reason to find your lenders locally to meet and check them out, well before they investigate you. The smaller and more private the lender, the more true this is (though the recent big box hacks might suggest that it's not just small-fry at risk).

Always ask the lender how they are protecting your personal information. Don't assume they know how to safeguard it or that that's even important to them. This applies to even the most honest, reliable, well-intended lenders.

(Beyond the scope here, but let's not even talk about what happens to your info if even an honest, legitimate, well-regarded lender, sells their notes.)

 Jeff