Private Money Lender too good to be true?

Question

Hello BP!

I networked with a gentleman by the name of Jason Coutts, who runs Willow Oaks Properties LLC, on LinkedIn and I was open to talk with lenders since I'm working on syndicating an apartment deal.

But upon getting an email from him I had a weird feeling and didn't persue it further. But looking at the loan terms and conditions it got me thinking, is this too good to be true? Whats the catch?

Terms are as follows:

1. 97% approval rate

2. No Collateral/Unsecured

3. Within 4 hour processing

4. 3 Hour approval process

5. Get Funded in 6 working days

6. There is 6 month grace period

7. I lend at the rate of %5 with no prepayment penalty

8. Borrower is subject to loan delivery through; Bank Transfer

9. Provide Valid ID card Or Driver's License

10. Duration of loan is within 6 months to 30 years

11. No Credit Check

12. Minimum Amount $4,000

13. Lending is maximized up to $50,000,000.00(secured)

14. No prove of income verification or tax returns.

15. Loan repayment is scheduled to start in not more than 180 days and Monthly payments

(rounded to the nearest dollar), and as specified in the Loan Agreement, the due date of

the first payment, also referred to as “the payment start date”.

All I can think is this is too good to be true! I can fund all the apartment deals I want by myself no problem!

What is this guys incentive besides making that interest from me, but he could easily make more on his own passively investing in large funds like Cardone Capital or something...

Not sure how to proceed. Especially with misspelled words in his Loan Terms and Conditions document. Everything is telling me to run away. But the potential of funding these deals I'm pursuing is making me want to investigate more.

Edit: The "Loan Application" doesn't ask for enough information to steal my identity. Unless Full name and a birthdate is enough to do so.

Jason D. · Answer

@Vic Liang definitely a scam. A few red flags that jump out right away....

1) No private lender is lending at 5%

2) No private lender that is doing $50 million is also doing $4000 loans. That's a complete waste of their time.

3) I dont see it in your post but I'm going to go out on a limb and say he has an @gmail email address?

It's not legit. 2 points and 7% I could believe, but these guys make it too obvious.

Rick Pozos · Answer

Why dont you go to a local real estate meet up and get to know people in person???

I know it is old fashion, its not hip, its not what all the kids are doing now, but it is way too easy to get scammed on the internet.

They play on your very strong desire to get a deal done. They know that you will do just about anything to get that first rehab done. Common sense goes out the window.

I met my wife online, but after a very short time, WE MET IN PERSON. You have to talk with your lender in person, go to their office, ask who they have worked with in the past so that you can verify that they are legit.

Mindy Jensen · Answer

@Vic Liang, no one who has $50 million to lend, is also making loans of $4,000. This is a scam.

Vic Liang · Answer

I know... Red flags be damned I wanted this to be legitimate!

Tom S. · Answer

@Vic Liang  As Jason mentioned above, it's absolutely a scam.  Lending $50 million with no credit check??

Network with people at REI groups, or call around to your local banks and credit unions.

Jake F. · Answer

If you used cut and paste on your first post directly from this guy, my guess is that English is not his first language based on the grammatical and syntax errors. For example, the author used "%5" instead of "5%". I know that's common in some countries like Turkey. It looks like Jason Coutts is a real person. I found his FB profile. He does appear to be living in Texas. Also might be Mormon for whatever that's worth. "Willow Oak Properties LLC" is not a recognized LLC in the state of Texas. Sure, it's possible it's registered in another state, but still odd.  Based on exactly three minutes of research, my guess is some foreign entity created a LinkedIn account using his name and is trying to scam you.

Vic Liang · Answer

@Jason D.

Yes you are definitely correct on the "@ gmail.com" point. Totally spaced out on double checking that.

I'm just in panic mode trying to secure more investors to confidently make offers on apartments and keep this ball rolling.

Vic Liang · Answer

@Stephen J Davis I apologize for sounding ignorant. But what should I be looking for in terms of gotcha fees, or catches?

Stephen J Davis · Answer

@Vic Liang Sorry, misread the $50,000,000 number. Still doesn't sound real to me. Every one of my deals was 20 to 25% down and secured by the property. I even had personal liability on the initial loan. When I refinanced that was removed. Do some more research before moving forward with them. Good luck.

Tom Woythal · Answer

Vic, please let me know what you find out. I need $15,000 equity out of our property ASAP. Our credit has very recently taken a major hit due to our rehab loan bills coming due (as we have not sold our property yet), and the banks and finance companies have turned us down for an equity loan (or any other kind of loan for that matter). This does sort of sound too good to be true, but then again, there is firece competition in the alternative loan industry right now, it seems, and so you never know. Can you tell me who these guys are? (the lender)

Private Money Lender too good to be true?

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