Structuring EMD with Private Lending Partner – Palm Beach Gardens Opportunity

Private Lending & Conventional Mortgage Advice

Structuring EMD with Private Lending Partner – Palm Beach Gardens Opportunity

Investor · Palm Beach County, FL · Member since 2024 · 14 posts · 24 votes

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

0 Reply

87 views

Most Popular Reply

Doug SmithPro Member

Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes

5mo

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.

1 Reply

See this reply in the discussion

5 Replies

Jump to latestLatest

Sort by

Corey Bolding
Member since 2026 · 15 posts · 2 votes
5mo
Hi Angela, let’s connect!
0 Reply
Mike GrudzienPro Member
Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
5mo
Interesting topic. I can't add, but I'm watching for replies.
0 Reply
Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
5mo
If you can't afford the EMD, probably shouldn't be buying the property. What lender is going to approve you for a loan if you can't even show enough liquidity to cover the EMD? As for your contemplated structures....preferred return of what? secured position of what? Can't wait to hear what guru strategies are recommended.
[email protected]
1 Reply
- Robin SimonBusiness Member
  Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
  5mo
  Quote from @Stuart Udis:
  
  If you can't afford the EMD, probably shouldn't be buying the property. What lender is going to approve you for a loan if you can't even show enough liquidity to cover the EMD? As for your contemplated structures....preferred return of what? secured position of what? Can't wait to hear what guru strategies are recommended.
  
  Agree with this
  [email protected]
  Harpoon Capital514 Reviews
  Website View Page
  0 Reply
Doug SmithPro Member
Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
5mo
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.
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.