Clay Sparkman
I remember when I first came into this business 15 years ago, the general attitude toward private money–and private money lenders and brokers–was quite negative. And to a certain extent, the reputation was not completely unearned. It was an industry that seemed to harbor a small handful of crooks and a great many more just plain unprofessional “business people.” And yet, what many people didn’t understand is that there were also a good many honest, professional individuals and entities offering a legitimate, useful, and important product.
As time went by, the rap on private money lenders improved significantly, and it almost got to the point over the years where you might say that private money was a bit “sexy.” Everyone wanted to have a piece of that market. Most of the players these days are honest, in my opinion, and many are highly professional, but still I think I’d like to have a go at those still in the market who are either dishonest or unprofessional or both. Some private money lenders quite simply don’t belong in the business. If not dishonest, they are paranoid and distrustful of every borrower that comes to them, and as such, they tend to go too far in trying to protect their investment. This TOP TEN LIST is dedicated to those folks. (They know who they are.)
Drum roll please…
Top ten clues that you should probably withdraw your loan request from a particular private money lender:
10. One number and two words: $25,000 non-refundable deposit.
9. The investor insists on moving in with the borrower to “keep an eye on” his investment.
8. The investor insists on language in the loan agreement to the effect that: borrower will not eat junk food during the term of the loan, you will not engage in bar fights, will certainly not smoke any sort of substance, and will not jump out of airplanes or otherwise engage in so-called extreme sports.
7. The lender requires a lien against borrower’s pet corgi Noodles as additional collateral to secure the loan.
6. Lender keeps referring to the subject property as “my property.”
5. Rates are by the day (uhhh … you know, like car title loans)
4. Lender keeps saying ka-ching at the end of every phone conversation.
3. The product on offer involves a one week term with a one week extension option.
2. The investor wants to become a co-signer on the borrower’s checking account.
1. The investor requests a perpetual easement to ride his ATV on borrower’s property—and the borrower’s lot is only 4,000 square feet.
– Clay (clay@privatemoneysource.com, 503-476-2909)
Clay is Vice President of Fairfield Financial, a primary source for private money since 1964. Currently targeting loans in Oregon and Washington, with potential to loan in: AK, CA, CO, ID, FL, GA, ID, MT, NV, NY, OK and TX. To submit a loan to Fairfield Financial for consideration: http://www.privatemoneysource.com/loanproposal.php
Tags: hard money borrowing, hard money brokering, hard money lending, hard money loans, private money borrowing, private money brokering, private money lending, private money loans
I would like to see you start lending in Missouri.
You have an excellent reputation in the mortgage world and fill a void where people need funding.
Thank you Curtis. (We’ll get there as soon as we can.)
Clay