Unfortunately, we live in a world where a growing number of people are devoting time and resources to ripping people off and leaving them irreparably harmed financially. The number of scams focused on separating you from your hard-earned money remain on the rise. For example, in 2018, there were 3.9 million reported cases of scams and frauds focused on stealing people’s money. That number means you are at much greater risk of being defrauded than being the victim of a violent criminal offense, according to Money Week.
Thus, it is imperative to be prepared to ensure you are able to spot some of the tell-tale signs of a potential scam.
Before delving into spotting potential scams, you may be asking yourself,”What is a hard money loan?” Well, a hard money loan is a short-term loan that is typically secured by a piece of real estate, or equity in property you own. Hard money loans can be extremely beneficial when you need a loan sooner rather than later in order to finalize an important business transaction such as purchasing a home you are planning to fix and flip.
Warning Signs Associated with Scam Artists Misrepresenting as a Hard Money Lenders
Here are some common warning signs/red flags you need to be aware of when seeking out a hardmoney loan in San Diego that could indicate the individual is a scam artist and not a legitimate hard money lender.
Warning Sign No. 1 – Can Close Any DealTrustworthy hard money lenders will decline loan requests for various reasons, especially if the project is determined to be too risky or you do not have the necessary equity or collateral to make the loan work. A lender looking to defraud will usually try to lure you in with crazy claims, including that they will fund basically any deal.
Warning Sign No. 2 – It’s GuaranteedIf the lender claims they will approve your loan application without doing any type of background check, you should run. The vast majority of legitimate hard money lenders require some form of a background check or general information concerning the type of loan you need, your collateral, the type of project, etc. before approving a hard money loan. Someone willing to approve you with no additional information may just be trying to rope you into a scam.
Warning Sign No. 3 – Require a Large Fee UpfrontScam artists will attempt to charge massive, upfront fees, with the intention of not funding your loan.It is common for hard money lenders to charge certain fees.However, if you are told that the fees due are excessively high, that is a red flag in which you are not working with a legitimate lender. A legitimate hard money lender in San Diego will refund part or all of your fees if it is not possible to complete the loan process.
Looking for Hard Money Lenders in San Diego? Contact PB Financial Group Today
PB Financial Group, a highly trusted, reputable and sought after hard money lender in San Diego and all of southern California has helped thousands of clients and can do the same for you. For additional information or to schedule a consultation with one of our experts please contact PB Financial Group at 877.700.3703 or visit www.CalHardMoney.com to learn more.
PB Financial NMLS #357614/DRE #01522495