How would a private or hard money loan look on paper

[Kynell Martin]

I have found a lender. But I am trying to do my due diligence on them. They asked me to fill out a application. I got an approval letter in my email with terms. They requested copy of my Id also. How does this sound so far? Are there any red flags or any I should look for before accepting the loan? Please help

[Kyle J.]

Originally posted by @Kynell Martin:

@Carter Crowley well he sent me copy of drivers license. Address and when I google the address his info pops up. Some information on skip trace sites has the info on him while others are vague. But it’s like that for me so it didn’t red flag me. Again has not asked for no money up front. At least not yet, and I clearly said I will not pay any upfront money only at close. He asked how will he be sure he will get his money back so I have collateral. I replied the property is my collateral. That’s when he emailed me contract

If you're saying that HE sent YOU a copy of his driver's license, then this is a scam. Real private lenders don't do that. They don't need to.  But that seems to be a fairly common ploy among scammers to convince you they're legit.  (I guarantee you it's not his license he's sending you a copy of anyway.)

Also, the question he asked you "How will he be sure he will get his money back" to me is another sign that he's a scammer.  A real private money lender would know the answer to this question and would not even do the loan unless they were confident in the borrower and the value of the asset they were lending on. 

The above, combined with the fact that you've never even met this person, makes all of this reek of a scam.