I got asked the question on Facebook about what to look for in a hard money lender on how to avoid scams.
Well, the easy answer is just to use us www.dohardmoney.com. Then you don’t have to worry about those things. HOWEVER, if we are not in your area then there are several things to looking for:
1. Member of BBB. At least that gives them a governing board that looks after them.
2. Somone that is a member of the National Hard Money Association. I am a founding Member.
3. Recent Deals funded. You need to see that they are really doing lending and not just taking your money and running.
4. Client Testimonials. You want to see what other people have to say about them.
5. Look for the rates, and terms to be set on their web site for the world to see. To many hard money lenders are going to get every penny they can out of you depending on the situation. We believe prices should be consistent.
There is not a big concern for the borrower in hard money. If the lender will give you the money there is really not a way for them to scam you. Read the documents and make sure you know what is going on and what the terms are posted on their web site.
We also offer two 30 day extensions for a borrower. This is at the option of the borrower not at the option of the lender. So if the borrower wants to, they can extend two times without needing the lenders permission. This is built right into the note.
I hope this helps.