Root cause is lack of confidence and/or fear of losing money.  

But, the situation you spelled out raises a lot of red flags. 

Another option can be using a Hard Money Lender, a lot of times there is just less red tape involved.

Anyone who ever says they can't get a loan because the property is owned by an LLC has some personal blemishes that are the root cause, not the LLC ownership.

That would be a red flag for me personally.

What red flags should I be aware of?

So much so that I went back to my roots, Somalia, Mogadishu.

Large up front deposits are usually a red flag that the contractor doesn’t have operating capital which often  leads to project slow downs.  

If I were going to do anything, I would have shut down the entire thread.You had so many red dots your profile looked like a Lite Brite 😂😂 sorry, mod humor.

We have opted for a hybrid approach - LPs who want to pay for access can get an exclusive network, privately discuss operators, privately review and see other LP reviews of sponsors, and discuss "red flag" sponsors.