Hard Money Myth #1:

Hard lenders are a bunch of disreputable loan sharks trying to prey on the unwary.

The reality:

Most hard money lenders are simply business people – not predatory lenders.  Most principals in hard money lending organizations are successful businessmen or women with backgrounds in law, accounting, banking, real estate development or real estate investment.  They provide a needed service.  Most are lending their own money along side money entrusted to them by friends, relatives and close associates.  Making loans is their business, and a bad reputation is counter productive to that effort.  Referrals are the life blood of the business as most are small organizations with a limited advertising budget.  That is not to say there are not unscrupulous people in the business, as in any business.  However, their numbers are small and dwindling as a result of technology.  A quick Google search will often expose the bad apples. 

Ask around for references, either among other real estate investors you do business with, or real estate agents, mortgage brokers and real estate attorneys.  Your local REIA will provide a wealth of information about who’s who in your local area.  In Massachusetts and New Hampshire, there are a limited number of local hard money lenders, so it’s not difficult to get information on any of us.