How to Find a Gator Lender (and Vet One Before You Wire)

Educational only. This explains how these situations generally work. It is not legal, tax or financial advice, and the rules differ by state — talk to an attorney or CPA about your own situation before you act on any of it.

Line one up before the seller says yes

Most purchase contracts want the deposit at title within a few days of signing, and some sellers want it the same day. That is the worst possible moment to meet a lender for the first time. You are rushed, and a rushed wire is what wire-fraud crews look for.

So treat finding a gator lender like finding a title company: do it on a slow week. Have at least two lenders who already know how you work, what your contracts look like and which title companies you use. When a deal lands on a Thursday afternoon, you send one email and get a quote, instead of posting in a group chat and taking the first reply.

If you are still fuzzy on what a gator actually does and how the fee math works, read gator lending explained first. If you are not sure the deposit is the money you need, compare it with the alternatives in gator lending vs. hard money vs. transactional funding.

Where gator lenders come from

There is no licensed directory of gator lenders. They come from a handful of places, each with its own trade-offs.

• Investor communities. The term grew up in subject-to and creative-finance communities, and those groups are full of members who fund deposits. The upside is volume and speed. The downside is that anyone can post “I fund EMDs,” so the vetting below matters more here than anywhere.
• Local investors and cash buyers. The landlords and flippers on your buyer list have cash and understand your deals. Some will fund a deposit on a deal they are not buying. Keep the roles separate: a buyer who funds your deposit should not expect a first look at the deal unless you both agreed to that in writing.
• Title-company and closing-attorney referrals. Escrow officers see who funds deposits on investor files and who gets repaid cleanly. Ask yours, “Who funds EMDs on files you close, and who is easy to work with?” A name that comes from title has at least been through a real closing.
• Operators who fund deposits as a business. Some buyers and lenders, including us through our EMD funding service, fund deposits on a standing basis with a written process. You trade a little flexibility on price for a predictable file every time.

Whatever the source, the test is the same: will this person read your contract, put the terms in writing, wire only to title, and still be reachable if the deal goes sideways?

What to send a gator lender

A serious lender wants to see where their money is going and how it comes back. Send everything in one message so they can quote without a back-and-forth:

• The signed purchase contract. The whole thing, not a summary. The lender is reading for the clauses below.
• The refund clause, flagged. Point to the page and paragraph that says where the deposit goes if you cancel in time, and whether the buyer can designate who receives it.
• The inspection or option period end date. That date is the lender’s real risk line. After it, the deposit may belong to the seller.
• Title company and escrow officer. Name, office phone from the company’s website, and whether the seller has signed title’s release form.
• Your exit. Assignment to a named buyer, a double close, your own funds or a takeout lender. Say how far along it is: buyer signed, buyer’s deposit at title, or still marketing.
• The closing date on the contract, and the realistic one if they differ.

Why the refund clause and the release form carry so much weight is covered clause by clause in EMD loan contract protections. A lender who does not ask about either one is not protecting their money, which means they may come after yours if the deal dies.

How to compare gator lender terms

Two quotes can look similar and cost very different amounts depending on how long the deal runs and what happens if it dies. Compare on four things.

1. Flat fee or a percentage per period. A flat fee is the same whether you close in 9 days or 40. A percentage per 30 days grows if closing slips. Here is a hypothetical $3,000 deposit with two made-up quotes — not our pricing and not a market survey, just the arithmetic:

Lender B is cheaper if you close on schedule and more expensive if title, the seller’s payoff or your buyer drags. Closings slip often enough that you should price the quote at your realistic date plus a few weeks, not at the contract date.

2. What happens if the deal dies. This is where terms differ most. Get answers in writing to three cases: you cancel inside the inspection period and title refunds the deposit; the deposit goes hard and the seller keeps it; and the seller refuses to sign a release, so the money sits in escrow. In the first case some lenders want principal only, some a reduced fee. In the second you will owe principal and fee personally under almost any agreement. In the third, the agreement should say who waits and whether a fee keeps accruing.

3. Who holds the deposit. Title or escrow, always. The lender wires to the escrow account named in the contract, and the refund goes back from escrow, ideally straight to the lender. Not to the lender’s account first, not to you, not to the seller.

4. A written agreement. Amount, fee, how it is repaid (normally a line on the settlement statement), the maturity date, what happens if the deal dies, and a statement that the loan is for business purposes. If you are still deciding how big a deposit to offer in the first place, see earnest money in wholesaling.

Usury and licensing vary by state. A gator or EMD loan is a private, business-purpose loan, and a flat fee on a short loan can be treated as interest when a court or regulator does the math. Usury limits and lender-licensing rules differ from state to state, and in some states they can apply even to business loans. Check your state before you lend or borrow.

Red flags that should end the conversation

• They want money sent to them. An “application fee,” a “commitment deposit,” or a request that you wire anything to them before they wire to title. A gator lender sends money; they do not collect it up front.
• They want to wire to you, or to the seller. Deposit money belongs in escrow. A lender willing to send it anywhere else is not checking where it goes.
• No written agreement, or “we’ll paper it after closing.” If nothing is written, nothing is agreed about the deal that dies.
• They never ask for the contract. Speed without reading means they have not thought about how they get paid back.
• Pressure. “This rate is only good for ten minutes,” or anger when you want to call title first. Legitimate lenders expect you to verify.
• Wire instructions by email only. Instructions, from anyone, get confirmed by phone at a number you looked up yourself.
• “Usury never applies to us.” Nobody who has checked says that.

Wire fraud deserves a separate sentence. Criminals spoof title-company and lender emails and send “updated” instructions, and a same-day EMD wire is a natural target. The CFPB’s guide to mortgage closing scams and the FBI Internet Crime Complaint Center alert on business email compromise both recommend confirming through a second, trusted channel. Tell your lender the title company’s name and let them find the phone number themselves.

The funding request, ready to send

Copy this into an email, fill it in, attach the contract, and send it to the lenders you have already vetted.

1. Property address and property type (single-family, condo, small multifamily).
2. Purchase price and your contract position (buyer, or assignee of record).
3. Deposit amount and the deadline it is due to title, with time zone.
4. Signed contract attached, with the refund clause cited by page and paragraph.
5. Inspection or option period end date.
6. Release form status: has the seller signed title’s release form, yes or no.
7. Title company, escrow officer, file number if opened, and the office phone from the company’s website.
8. Contract closing date and your realistic closing date.
9. Exit: assignment, double close, own funds or takeout lender, and its status (buyer signed, buyer deposit received, still marketing).
10. Spread: your expected assignment fee or resale price, so the lender can see the fee fits.
11. Borrowing entity and signer.
12. Business-purpose confirmation: investment property, no one in your group will occupy it.

Add one line: “Title has been told this deposit is third-party funded,” or that you will call them before the wire.

How Restar handles EMD funding

Restar Acquisitions is a family-owned principal buyer of single-family houses, and Trevor McAmis underwrites every deal personally. We also fund earnest money deposits for wholesalers and investors as a private business-purpose lender through our EMD funding program.

How we work: we read the contract and call title before we fund. The fee is a flat amount per deal, agreed in writing before anything is wired, and repaid at closing from the settlement statement. We wire only to title, after verifying the wire instructions by phone. We quote the same business day. We do not fund owner-occupant or consumer purchases, and some deals we decline because of a state’s lending rules. You do not have to sell the deal to us to use the funding.

Educational only — talk to a real estate attorney in your state before you rely on this.

Common questions

How do I find a gator lender?

Through investor communities, the local cash buyers and landlords you already sell to, referrals from your title company or closing attorney, investor meetups, and operators who fund deposits as a business. Vet any of them on written terms and their willingness to wire only to title.

What does a gator lender need from me?

The signed contract, the refund clause and inspection end date, the title company and escrow officer, whether the seller signed a release form, your exit and closing date, and confirmation that the deal is for business purposes.

Is a flat fee better than a percentage?

A flat fee is predictable if closing slips; a percentage per period can be cheaper on a fast close and more expensive on a slow one. Price both at your realistic closing date plus a margin, and compare what each charges if the deal dies.

What happens to a gator loan if my deal falls through?

If you cancel inside the inspection period and title refunds the deposit, the principal goes back to the lender and the agreement says whether any fee is owed. If the deposit goes hard and is forfeited, you will usually owe principal and fee personally.

Should a gator lender ever ask me to send them money?

No. A gator lender wires the deposit to title. Requests for up-front fees, or to route money through the lender, are reasons to walk away.