The question behind every "has anyone worked with this person?" post

How do you check out a borrower before you send the money?

Stride Capital · September 22, 2026 · 3 min read

Private lending runs on introductions. Somebody vouches for somebody, the numbers look reasonable, and the money goes out. It works most of the time, which is exactly why the times it does not are so expensive.

Our founder lost her first private loan to a borrower who took the money and disappeared. The uncomfortable part was not the loss. It was realizing that nothing about the process had been unusual. This is the checklist that came out of it.

1. Confirm the person is who they say they are

• A government ID, matching the name on every document you are about to sign.
• A video call with the camera on. Not a phone call, not text messages.
• The company: look it up in the state business registry and confirm that the person signing is allowed to sign for it.
• A background check. It costs very little, and it is the step most private lenders skip.

2. Verify the track record instead of taking their word

Anyone can say they have done thirty deals. Ask for two properties they finished in the last year and look them up. Sale records are public. So are building permits. If the deals are real, this takes fifteen minutes and the borrower will not mind.

• References from lenders who have actually been paid back, not from partners or coaches.
• Ask what went wrong on their last deal. Anyone with a real track record has an answer, and the answer tells you how they behave under pressure.
• Ask who else is lending on this deal, and then talk to that person.

3. Review the property yourself

• Look up what similar nearby homes recently sold for. Do not rely on the borrower's spreadsheet.
• Read the title report. Unpaid taxes, court judgments and other claims on the property decide where you really stand.
• See the property, or send someone who will walk through it and send photos with the date on them.
• Read the renovation budget line by line, and ask who is doing the work.
• Confirm the insurance, and confirm you are listed on the policy.

4. Make the repayment plan specific

"We will sell it" is not a plan. A signed listing agreement, a buyer already under contract, or a written refinancing offer from a bank is a plan. Ask what happens if that slips by three months, and write the answer down before you fund the loan, not after.

5. Put it in writing, properly

• A written loan agreement and a legal claim recorded against the property at the county. Recorded — an unrecorded claim protects nobody.
• The money moves through the title company or the closing attorney, never directly to the borrower.
• Your position in writing: who gets paid before you, and how much they are owed.
• For renovation money, release it in stages tied to work actually completed and inspected.

Warning signs that show up early

• Urgency that is always someone else's fault. "We close Friday" as the reason you cannot verify anything.
• A camera that never turns on.
• Pressure to send money directly instead of through the closing.
• Vague answers about who else has a claim on the property.
• A story that changes between the online post, the phone call and the paperwork.
• Numbers that only work if every single assumption lands at its best case.

An honest borrower with real collateral makes things right when a deal goes sideways. A dishonest one goes quiet. The whole job is telling which one is across the table before the money moves.