Capital dream solution, are they a scam?

Question

Has anyone ever hear of Capital dream solution, hard money lender? I saw this Facebook post on a real estate group for a hard money lender, I reached out and no one would ever answer the phone. They said me the terms via email and the terms just seem too good to be true.

- Loan amount ranges from and $10k minimum and $5M per transaction.
- Loan Duration is 3 months minimum and 30yrs maximum.
- No prepayment penalty attached to my loan program.
- Loan interest rate is 6% minimum and 7% maximum depending on the loan amount and duration.
- But then they say, "we charge loan origination fee and is the only fee required before getting you funded, It's 100% refundable".

I don't know if I'm being paranoid or if this is really a scam. I would love to know if anyone has ever worked with them or if this something that is too good to be true.

Would love to hear some feedback.

Odie Ayaga · Answer

Jeff covered it pretty fairly. Find people in your network or sites like here to give you referrals for lenders. Don't just pick one at random.

Jeff S. · Answer

“I saw this Facebook post …”

You could have stopped right there, @Chanie Chriqui.  Facebook, LinkedIn, Connected Investors, Craigslist, and most other anonymous websites are cesspools of scammers.  On its face alone, no pun intended, this is almost certain a scam.

“Loan interest rate is 6% minimum and 7% maximum depending on the loan amount and duration.”

You mean I could borrow $5M for 30 years at 7%???  I will take every dime they have and loan it out legitimately at almost double that rate.  No honest lender has rates that low.  You can expect to pay something on the ballpark of 10% plus a few points.

"we charge loan origination fee and is the only fee required before getting you funded, It's 100% refundable".

Yeah, right.  Bad English aside, which is a tell-tale sign, at least they are being honest that there will be up-front fees and the virtual certainty you will be ripped off.  NEVER pay up-front fees.  There is absolutely no reason a legitimate lender can’t settle everything thru escrow, title, or a closing attorney, as appropriate in your state.  Up-front fees are the biggest red flag in private lending.

Until we can socialize again, your best option is to go to Meetup.com and call some local real estate club operators.  Ask which local lenders regularly attend their club and who have the best reputations.  Call these people and have a conversation with a list of informed questions.  Never rely on anonymous strangers you met on the web to find your money, Chanie.  There are just too many scammers out there.

Chanie Chriqui · Answer

Thanks Jeff, it definitely sounds too good to be true. My husband brought up the same the point about the English grammar and said the guy could hardly speak English over the phone. I guess this post was also to let others know that if they come across the same post from Hamis Kimodo from "Capital dream solution" to stay away.