Private Money Lenders and Their Typical Runaround

[Dave Tobi]

I've lost all credibility for private money lenders. I don't think I'll ever consider them. Are most of them just professionally dishonest or what? What's so hard saying you cannot fund a project at the outset, so that the investor or developer can make other arrangement ahead of time. 

Went through 7 or so of them for a large project I wanted high leverage for. Keep in mind, I have excellent credit, strong liquidity, net worth, experience and of course a great deal. Typical good deal response from them, ask for docs, get approval/commitment, reassure you of funding, e.t.c. You feel you are all locked in and keep them posted! 

A week to scheduled closing, you don't hear from them and you panic...no return calls, they avoid your calls, no email response, absolutely nothing. The few that got back, gave stupid reasons/excuses. I can't wrap my head why they do this. If you cannot fund a deal or changed your mind, just say so. Caused me a great deal of anxiety and stress scampering last minute to secure the deal. 

I did end up going conventional and putting more money down. Wasn't my preference but glad I did it for a peace of mind. I'll rather put 20-30% down next time with a local bank than to deal with these phonies. This includes most of the highly reviewed private money lenders advertised/mentioned here.