How To Know If Lender Is Legit?

[James C.]

Hey BP,

So I've been trying to get in real estate in the past year, but HML in my area (Philadelphia) have a lot of upfront cost plus fees just to purchase a property. Some are even requesting 20k just to purchase and additional money for rehab. I'm 23 just got out of college so I don't have that money at the moment.

I have a colleague that has a private lender that only funds the rehab, and my colleague found him on Craigslist. So I did the same. Issue is that a "lender" reached out. After I contacted him, he immediately asked what I think my loan amount will be, once I told him, he said no problem and emailed me a loan application. Mind you, only thing he requested was identification didn't ask to verify my income, check my credit score, nothing. He says I need to give him $1,100 as origination fee to cover the background screening and other fees, but his offer is too good to be true. He says that once I request the loan he will then verify my income and background check. 

5% interest rate, low monthly payment, 100% funding (purchase + rehab), no prepayment penalties and could close in 2 weeks. He's shown me a picture of his account, his face + ID, and even a video of him in frame stating his name.

I just feel uneasy because the deal sounds way too good to be true. What is the norm the BP community come across when dealing with private lenders?