Red Flags To Avoid When Seeking Arizona Hard Money Lenders
The Best Types of Deals For Arizona Hard Money Loans
June 13, 2020Who Are Hard Money Lenders?
June 13, 2020Selecting potential Arizona Hard Money Lenders can be a challenging process. It is very important to know and avoid certain lenders who raise the following red flags.
Because Arizona Hard Money Lenders are private individuals or small groups, it can be hard to evaluate them and separate the honest lenders from the scam artists. But this is a critical process that must be carefully completed before requesting a hard money loan. Knowing a few of the most common red flags that could appear during your evaluation process could save you a lot of time and money in the future.
Arizona Hard Money Lenders are in business to make money. And the only way that a legitimate lender can make money is by providing loans. If you are having a hard time getting a private lender to return your calls or respond to your email, then chances are, you want to eliminate this lender from your list. Honest Arizona Hard Money Lenders are eager to respond to and work with new clients. And any lender who is not active in responding and providing information is not trying to run a legitimate business.
Another red flag has to do with communication, but not a complete lack of contact or communication. You might find a lender who is eager to take your call and talk for hours about all that he or she has to offer you. But when you request that information in writing or send a question via email, the only responses come verbally. This is a tactic to avoid putting any promises, fee structure or details in writing so that the lender can overcharge you or simply disappear with your processing fees and possibly your personal identity information. Any reputable lender will be completely transparent and will gladly provide all of the written documentation that you request.
Large Upfront Fees
It is not unusual for lenders to request an appraisal fee up front as that is needed to determine the value of the collateral. But lenders who are requesting large application fees or processing fees for the application could be a scam that will disappear once you pay the fees. As soon as you learn of substantial upfront fees, you should begin to explore references and seek information about previous projects and previous loans which the lender has funded to determine if they are really a legitimate lender or a fee scam artist.
Be Attentive And Realistic
Using a private lender is no different than selecting any other service provider. During the evaluation process, you need to pay attention to the level of service and the time it takes to get a response. Also take note if the lender avoids answering certain questions about the process, the fees or the business in general. These can be signs that at the very least the lender has something to hide. And in the worst cases, the person is not even a legitimate lender and is just trying to scam you out of fees and possibly personal information. Be realistic and only work with the lenders who freely offer information and are willing to provide it to you in writing.
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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