Private Money Lenders

[Rohme Williams]

So I have been vetting private money lenders from a pretty reputable website and have asked multiple questions about how the process transpires.   In the experience from all of the investors here on the BP forums that have used private money, what is the process for private money lenders?  I can understand that they want to know that you have skin in the game by paying certain fees and origination costs.  However, I was of the understanding that origination fees are paid at the close of Escrow.  Should you pay any fees up front when it comes to a private money loan??  Please, any advice is good advice. 

[Matt Neisser]

I’ve written out this in the past : 

Questions to ask:

Are you a direct lender or do you work with brokers?

Do you have the available funds to close this loan or is there a limited amount of funds you have to lend this month?

Can you explain all your fees?

When will you issue a written term sheet or commitment letter?

Things to be careful of:

Be very careful of online directories.

Many are just lead generation sites and sell your name and information to brokers

Large application fees or upfront money that is requested prior to issuing a term sheet and only accepting checks without the ability to accept credit cards

Anyone that uses gmail, aol or any non-corporate email

Check that they have a working website with a phone number and address

Someone that says they are a direct lender but:

Asks you to fill out an application without a logo or contact information

Asks you to fill out different forms with very similar information

Needs an excessive amount of time to get back to you or

Typically these are signs you are working with a broker or non - lender