“From my perspective, probably the worst mistake an investor can make is to attempt to secure financing without performing the proper due diligence,” Hyde said.
LinkedIn is arguably the most “professional” of social media platforms and, as a result, many real estate investors doing due diligence look to the website to find out as much as possible about potential private lenders and investment partners before they team up. However, even LinkedIn has its weak points, as a recent cryptocurrency scam illustrated painfully when investors allegedly lost millions of dollars after buying into a fake blockchain startup with its own faux white paper, Twitter fans, and, yes, LinkedIn account.
“You cannot rely just on the internet when you perform due diligence, even if you are using really reputable sites,” warned Linda Hyde, executive director of the American Association of Private Lenders (AAPL). As part of the association, you are held accountable by your clients and your peers who can file a Code of Ethics Violation against you.
“From my perspective, probably the worst mistake an investor can make is to attempt to secure financing without performing the proper due diligence,” Hyde said. “We find so many investors being scammed after finding financing on places like LinkedIn and trusting the lender without doing any checks on the actual business.”
Given that AAPL is the only national member association in the private lending industry and, further, defined by what Hyde refers to proudly as “a set of clearly defined, well-organized principles of cooperation, education, ethics and accountability,” the association provides a valuable service to real estate investors seeking capital as well as those on the lending side of the equation. “We urge every investor seeking funding to call us and let us help with that due diligence process,” Hyde said. “We can help you check up on lenders you have questions about.”
AAPL sends representatives to real estate investing events all over the country to help investors on both sides of the private lending equation with due diligence, education, and effective communication when it comes to funding. “This is one of the big reasons we exist,” said Hyde, “to help all investors make good decisions when it comes to the lending process.” She will personally attend the Think Realty National Conference & Expo in Dallas, Texas, on February 24-25, 2018. “I hope everyone comes by our booth in the exhibit hall to learn more about finding reputable sources of funding for their real estate deals,” she said.