Gator Lending? Why? 🐊

New to Real Estate · Austin, TX · Member since 2023 · 4 posts · 12 votes

Hey Everyone,

Newbie here trying to get some clarity on "gator" lending. I know, it's the flavor of the day, but it at least got me to to perk up. That said, I'm either missing something or this is another snake oil scheme. So the question is - why would someone entering a deal/assignment need a gator to cover EMD?

Let's say EMD is only between $2,000 and $5,000, depending on the deal. From my POV, it worries me that the person with this deal/assignment doesn't A. have $2k - $5k free for EMD OR B. Is willing to add another person (the gator) to this transition, further complicating it for only $2k - $5k + gator fee.

What am I missing here?

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Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes

Quote from @Ned Carey:

@Steven Greenwalt I don't not know exactly how Gator lending works. However from what I have read here, it seems like a really stupid idea. Borowing an EMD is super high risk and lending to someone who can't put come up with an EMD is also high risk. It seems like a really stupid concept to me.

Perhpas some with actuall knowledge of how it work could illuniate us. My guess is though that as you and I suspect it is the "flovor of the day" as you say and a pretty bad flavor at that.

I just saw a video of the gator guy saying he bought a property using Subject To with no money down. He used a gator lender to put in the money needed to finish the transaction. He said there was no equity in the property and yet he walked away with money at closing.

So, he buys a property that has no equity, uses an unsophisticated gator lender to overfund the deal, above the value of the property and he gets cash out.

For those of you in Rio Linda land, that means there is nothing protecting the gator lender. Nothing.

If he defaults, or the DOS is called or any number of others things, the gator lender has to either pay off the underlying loan that is taken Subject To, or lose their entire investment.

If the gator lender does pay off the underlying loan, they are stuck with about 10% costs to sell the property. So, an overleveraged property that had no equity to begin with and now an additonal loss from the costs of selling.
What could go wrong?

Now do you understand his version of "gator lending"?

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V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
The amount of alter-egos this fella has is absurd. Now he has aliases under girls names like Noel?
This form of lending is stupid to engage in, if they have 5-7 deals and don't have $25k-$35k in capital to do it then they clearly aren't succeeding with Pracer's "teachings". $25k-$35k is a joke to enter real estate with.
There's very little reason to engage in transactional "gator" lending. And very little reason to join this group. The alter egos and shills just show how little it's succeeding and how desperate it appears.
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Steve K.
Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
2y
Quote from @Noel Parker:

"he gives so much to his community and i would challenge you to find anyone in his community that say they are not getting their value."
Maybe you won't find anyone in his community saying they are not getting their value there (at least not out loud) but that's probably because saying anything at all critical there will apparently get you kicked out immediately (guess the community is only "forever" if you keep any constructive criticism to yourself). There are folks on here and on reddit, and probably anywhere else where free speech is allowed, who paid for the "mentorship", and have plenty of criticisms. Just do a quick google search and skip all the obviously fake reviews that say the exact same key words and phrases. Anyone who has to pay for good reviews, deletes any critical comments and blocks those people, and can't answer any real follow-up questions when someone digs into what their word-salad comment is actually supposed to mean (like when he tried to explain how to handle a due on sale clause on here a few months back, and made up a ridiculous answer that we all called him out on because it was wrong, then he stopped commenting), is a little sketchy IMO.
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Cheryl Vargas
Rental Property Investor · Rohnert Park, CA · Member since 2014 · 307 posts · 160 votes
1y
Quote from @Steve K.:

Quote from @Noel Parker:

"he gives so much to his community and i would challenge you to find anyone in his community that say they are not getting their value."
Maybe you won't find anyone in his community saying they are not getting their value there (at least not out loud) but that's probably because saying anything at all critical there will apparently get you kicked out immediately (guess the community is only "forever" if you keep any constructive criticism to yourself). There are folks on here and on reddit, and probably anywhere else where free speech is allowed, who paid for the "mentorship", and have plenty of criticisms. Just do a quick google search and skip all the obviously fake reviews that say the exact same key words and phrases. Anyone who has to pay for good reviews, deletes any critical comments and blocks those people, and can't answer any real follow-up questions when someone digs into what their word-salad comment is actually supposed to mean (like when he tried to explain how to handle a due on sale clause on here a few months back, and made up a ridiculous answer that we all called him out on because it was wrong, then he stopped commenting), is a little sketchy IMO.
I’ve gotten my money’s worth after my first year in Pace’s group for sure. People are frequently collaborating and doing deals together, which is the cornerstone to the group. Many OG gators help out the newbies and bring good deals to lend on. I’ve gotten $10k in returns from a couple of 6 month loans, and some EMD loans.
I’ve found a core group of people that I can trust, and I’ve learned how to evaluate the borrowers and good contracts to use to protect my money, and that's helped me immensely.
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Steve K.
Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
1y
Quote from @Cheryl Vargas:

Quote from @Steve K.:

Quote from @Noel Parker:

"he gives so much to his community and i would challenge you to find anyone in his community that say they are not getting their value."
Maybe you won't find anyone in his community saying they are not getting their value there (at least not out loud) but that's probably because saying anything at all critical there will apparently get you kicked out immediately (guess the community is only "forever" if you keep any constructive criticism to yourself). There are folks on here and on reddit, and probably anywhere else where free speech is allowed, who paid for the "mentorship", and have plenty of criticisms. Just do a quick google search and skip all the obviously fake reviews that say the exact same key words and phrases. Anyone who has to pay for good reviews, deletes any critical comments and blocks those people, and can't answer any real follow-up questions when someone digs into what their word-salad comment is actually supposed to mean (like when he tried to explain how to handle a due on sale clause on here a few months back, and made up a ridiculous answer that we all called him out on because it was wrong, then he stopped commenting), is a little sketchy IMO.
I’ve gotten my money’s worth after my first year in Pace’s group for sure. People are frequently collaborating and doing deals together, which is the cornerstone to the group. Many OG gators help out the newbies and bring good deals to lend on. I’ve gotten $10k in returns from a couple of 6 month loans, and some EMD loans.
I’ve found a core group of people that I can trust, and I’ve learned how to evaluate the borrowers and good contracts to use to protect my money, and that's helped me immensely.

How many cases of Gator lenders being ripped off have you heard about in the group so far?
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