Red Flag #5 — Constant Communication Before Closing That Disappears Afterward
One of the easiest things to evaluate before giving someone your money has nothing to do with the property, the appraisal, or the projected return.
Watch how they communicate.
More importantly, watch whether that communication changes once they have your money.
This is Red Flag #5 in our series, “10 Red Flags Your Potential Operator or Borrower Could Turn Into a Fraud That People Often Miss.”
As with every red flag in this series, this behavior by itself does not mean someone is committing fraud. People get busy. Projects get complicated. Communication styles differ.
But when someone is incredibly attentive while trying to get your money—and suddenly becomes difficult to reach once they have it—that change deserves your attention.
Before the Money: They’re Always Available
You’ve probably experienced this.
Before the investment or loan closes, communication is incredible.
They answer the phone immediately.
Texts are returned within minutes.
They send pictures, numbers, documents, and updates.
They’re checking in with you:
“Do you have everything you need?”
“Any other questions I can answer?”
“When do you think you’ll be ready to fund?”
You almost can’t get them to stop communicating.
Then the money gets wired.
And suddenly…
Everything changes.
Calls go to voicemail.
Texts that used to get answered in five minutes now take two days.
Emails go unanswered.
Updates that were supposed to come every week stop arriving.
And when you finally reach them, there’s always an explanation for why they’ve been so busy.
That doesn’t automatically mean something dishonest is happening.
But I would absolutely start paying closer attention.
The Question Isn’t How Well They Communicate When They Need Something
Anybody can be responsive when they’re trying to close a deal.
That’s why I don’t think you should judge an operator or borrower solely by how they communicate before you fund them.
The better question is:
How do they communicate when they no longer need something from you?
That’s when you begin to learn a lot more about the relationship.
Good operators understand that receiving someone’s capital creates more responsibility, not less.
If someone trusts you with their money, your obligation to communicate shouldn’t decrease after closing.
It should increase.
Communication Is Part of Risk Management
People sometimes treat communication like customer service.
I don’t.
When my money is involved, communication is part of risk management.
If a project is going well, I want to know.
If a project is behind schedule, I definitely want to know.
If the rehab budget is changing, tell me.
If there’s a problem with the contractor, tell me.
If the property isn’t selling, tell me.
If the exit strategy has changed, tell me.
I don’t expect every investment or real estate project to go perfectly.
I expect problems.
What concerns me is when there are problems and the person responsible for my capital stops communicating about them.
Silence doesn’t fix problems. It usually makes them harder to evaluate.
Bad News Isn’t Necessarily a Red Flag
This distinction is important.
Bad news and bad communication are not the same thing.
In fact, I often have more respect for an operator who calls me early and says:
“Tom, we have a problem.”
Maybe the project is 60 days behind.
Maybe the rehab came in $20,000 over budget.
Maybe the buyer backed out.
Maybe the appraisal came in lower than expected.
Those aren’t conversations anyone enjoys having.
But that’s business.
What matters is what happens next.
What happened? What are you doing about it? What’s the new plan? What does this mean for my capital?
An operator who proactively brings you bad news and presents a reasonable plan may actually build trust through a difficult
situation.
The person I’m more concerned about is the one who tells me everything is wonderful until I discover otherwise.
Watch for the Change in Behavior
The red flag isn’t simply, “They didn’t return my call.”
You’re looking for a pattern and a change from their previous behavior.
For example:
Before funding: calls returned immediately.
After funding: repeated calls go unanswered.
Before funding: detailed weekly updates.
After funding: you have to request every update.
Before funding: happy to discuss the numbers.
After funding: vague answers about where the money went.
Before funding: eager to meet or jump on Zoom.
After funding: always too busy.
Before funding: proactive communication.
After funding: communication only happens when they need more money.
One instance might mean nothing.
Several of these happening together?
Now I’m paying attention.
Establish Communication Expectations Before You Fund
One of the simplest ways to protect yourself is to discuss communication before the money moves.
Ask questions such as:
- How often will I receive updates?
- What information will those updates include?
- Who is responsible for communicating with me?
- How quickly should I expect questions to be answered?
- How will you notify me if the project falls behind or goes over budget?
- What happens if the original exit strategy changes?
Then pay attention to whether those expectations are actually met.
You aren’t trying to micromanage someone’s business.
You’re establishing accountability around your capital.
Don’t Ignore the First Signs of Avoidance
There’s a natural tendency to give people the benefit of the doubt.
Usually, that’s a good characteristic.
But giving someone grace doesn’t mean ignoring patterns.
If communication suddenly changes after your money is transferred, don’t immediately assume the worst—but don’t ignore it either.
Start asking questions.
Request the current project status.
Ask for updated financials or documentation where appropriate.
Verify progress independently when possible.
Understand where your money is and what has changed since you originally underwrote the opportunity.
The earlier you identify a real problem, the more options you may have for addressing it.
Communication Should Get Better When Things Get Worse
This is one of the standards I think every operator should live by:
The worse the situation gets, the better your communication should become.
When everything is going according to plan, an update is easy.
Character shows up when the contractor walks off the job, the budget gets blown, the property doesn’t sell, or the original exit strategy stops working.
That’s when investors and lenders need information the most.
If someone communicates constantly when they want your money but disappears when there’s a problem with your money, that’s a pattern worth remembering.
The Bottom Line
Don’t evaluate communication only during the courtship.
Evaluate it during the relationship.
Pay attention to how quickly someone responds before closing—and whether that responsiveness remains after the wire clears.
Pay even closer attention when something goes wrong.
A good operator doesn’t have to tell you that every project is perfect.
They should be willing to tell you the truth about what is happening, what they’re doing about it, and what it means for your capital.
And remember, none of these behaviors alone proves someone is dishonest or committing fraud.
We’re looking for patterns.
We’re looking for changes in behavior.
And we’re especially looking for multiple red flags beginning to stack on top of each other.
Because when you’re trusting someone with your money, underwriting shouldn’t stop at the property, the numbers, or the projected return.
Don’t just underwrite the deal. Underwrite the person.
