Structuring EMD with Private Lending Partner – Palm Beach Gardens Opportunity

[Angela M Alvaroe-Ciampo]

Hi everyone,

I’m currently reviewing a ~$1.6M value-add opportunity in Palm Beach Gardens and exploring options for structuring the earnest money deposit with a private lending partner.

Curious how others here are approaching short-term EMD funding — whether through preferred return, secured position, or other structures that have worked well.

If anyone is active in this space or open to connecting, I’d be happy to share more details as I finalize comps and scope.

Appreciate any insights.

Angela

[Doug Smith]

We won't touch EMD or Gap Funding. Those that teach doing this are leading lambs to slaughter. In 35 years I've seen three major crashes and right before every one of them, lenders get aggressive with LTVs at 100% or even more. They are the first ones to lose their shirts. I know one famous guy that teaches this, but when you look at his profile, he 1) doesn't have a credit background, and 2) started after the last big crash...so he's never seen one. I suppose he sells a lot of courses though. I will contend that a strong lender that is truly protecting the downside risk of their portfolio will require skin in the game and will be more conservative with their CLTVs. I am sure there are those that will fund that, but they likely won't be around after the next hard downturn. Perhaps I could suggest grabbing a capital partner? I do wish you well.