Upfront fees for due diligence from private money?

[Uwe S.]

Originally posted by Nikko Lawson:

I was recently contacted by a private money broker who works for a group called Kingdom Financial (website listed below) and we're working to get a MHP deal funded. Everything seemed great except there was one red flag that did stand out to me and I wanted to see what your opinions were on it:

After I submit the deal to Kingdom Financial, it goes through analysis, and the private money group decides they want to submit an LOI for the project. They then will ask for $3,500+ to do their own due diligence on the project. They want this money upfront as they call it "fees for services rendered." This sounds fishy to me and this is not how I'm accustomed to this being done; although I am new to the private money game.

I'm not saying that this group is a scam or anything like that. I have just been told by everyone not to accept any lending deal where there are up front fees involved. I mean NO DISRESPECT TO ANYONE FROM KINGDOM BUILDERS and I am just making sure I look after my investment dollars as wisely as I can. Can anyone out there please enlighten me with your opinions on this? Thanks!

The website can be found at http://www.kingdombuildersfinancial.org/default.html

Just saw this in a Pro Forum, I can't reply there so my answer here.

Checked the website, is registered since 2011, they told on website company is in business since 2005, so why 2011 first homepage? Then I saw, domain registered in UK not US!!

Multi Million $$ closings and this bad website for max 100 bucks I guess, thats handle with care!

And then I saw the compensation plan for consultants, real text there:
"Manager Level Short Sale Consultant
Upon Recruiting 10 New Consultants and closing of 3 personal deals
50% commission upon closing of personally referred deals
20% override upon closing of Personal Recruits referred deals"

50% commission for a closed deal? From what, the loan? LoL, that must be a joke, if you want $250k they pay the consultant $125k.

Thats more an red flag then all what I saw in last years with financing. Upfront fees go well together.

-Uwe