Commercial Real Estate Funding, Financing and Lending: A Scammers Paradise?

[Joshua Dorkin]

It seems like every time I look up, there's a new "commercial lending" or "commercial funding" company that has popped up across my networks.

The individuals offering these commercial loans are always offering somewhere between $1/2 million and sometimes even $1 billion in loans. Of course, researching these businesses always leads nowhere.

Many of the people promoting these loans are "consultants" -- typically just affiliates for some MLM promoting commercial loans. I'm not talking about them, but it seems that the companies who recruit them are popping up as fast as you can say "loan."

It seems that I can never find a website with a legitimate company associated with any of these various commercial lenders.

I guess I was curious what others have run across?

Are these folks just a bunch of scammers trying to take advantage of people (my theory) OR is there something I'm missing?

It looks to me like this is an industry that is completely overrun with BS, NO?

I look forward to the feedback.

NOTE: I realize that private money is typically just that -- private -- but it seems like there is something amiss here....

[Karen Margrave]

Most people that are working in commercial real estate should be experienced enough to know when talking to someone if they are legitimate or not. If someone is asking for upfront fees, that should be a big red flag. Also, check their licensing to see if it's current, have they had any complaints, etc. How long have they been licensed? How long have they been at their current location? What recent projects have they funded? Do they have references that are verifiable? Like everything, do your homework.

If someone can't follow along when you're talking to them on your project, doesnt' ask the questions they should be asking, etc., then stay away! Trust your instincts.

To many times people are so desperate to find funding that they don't want to "offend" a lender, etc., and think they're at the mercy of the lender. You're not. Though you need the money, you don't have time to waste on flaky lenders, so ask the questions - a solid lender will appreciate your thoroughness.