gator lending and the pros and cons

[Farley Youman]

I have recently looked into Gator Lending. Although I have read 60 books on real estate investing (and completed fix and flips for profits), I do not know a lot yet about gator lending and the pros and cons- and most importantly the risks. 

-If I use this method, I will definitely want it to be set up with a title company for protection.

-I may also want to meet in person with the title company first to get the pros and cons and of course the risk level.

I am very cautious when it comes to real estate, and because of this I have never lost money on real estate. My method is less location, location, location, but rather cautious, cautious, cautious!

To further reduce my risk (and yours as well), I would want to partner up together with another "gator" at least for the first few deals. In other words, I would pay half the earnest money- or whatever the payment was for, and you would pay the other half. Please let me know if you are interested or have tips on this subject. I would be particularly interested in hearing from someone that has already done this method, or a title company that has performed this process. 

I am located in GA and if I do this method, I will probably do it here since the laws seem to be fairly protective in this great state.  I would also be interested in other states that have similar laws. Thank you.

[Richard Elvin]

@Farley Youman You mentioned you've completed fix and flips, I would focus on that, especially as it sounds like it's been profitable.
If you're referring to the gator lending that's lending money to wholesalers, I personally wouldn't do it. If someone doesn't have the funds for the EMD, I don't want to put my money on the line.

IMO all the talk about not doing it without "the contracts that protect me" (search gator lending on BP and you'll see what I mean) isn't relevant. If something goes wrong during the deal and the wholesaler loses the EMD the contract may determine the money is yours, but how are you going to enforce the contract? The wholesaler didn't have enough money for the EMD in the first place, you have zero equity, no lien, there's a saying about blood from a turnip...

How many deals would you have to do before losing all of the EMD wouldn't cause a negative roi? That's the question I would be asking myself.

Just my opinion. I've never done gator lending, so YMMV.