Private Money Loan Gone Bad!

[Michael Naim]

Hello,

I am an investor in the Los Angeles area and am looking for advice on a private money loan gone bad.  

Last year I was contacted by an investor who I was familiar with for a few years, bigger pockets member actually, who was looking for a private money loan.  He had a property under contract that he wanted to fix and flip in the Los Angeles area.  I made a private loan to him for $24K.  The original agreement was that this amount was to be used until enough progress was made to draw from his hard money loan.  He offered 10% and stated that he intended to repay in 2 months once he could draw from the hard money loan.  Long story short (his story), the city was giving him problems about approving additions he planned to make and after a year he decided to sell the property without having done any repairs.  The loan contract was written for a term of 1 year should his initail estimate of 2 months for turnaround not be met and included extra intrest in that case.

At the time of closing he called saying that a lein had been placed on the property by another party who had brought him the deal and that he could not repay the full amount.  I got a check from escrow for $20K and have not heard from him since (2 or 3 months).  Leaving me short $4K principal and about $4K intrest.  

I'm not sure how to check if this was a total scam from the getgo (if it was this becomes a very embarassing story for me and I very happy that I got most of the money back) or if the investor's story was legit.  Either way, the fact that I cannot get ahold of him now is very concerning.  

Any advice on how I can persue this would be much appreciated. 

Thank You!