How Are These Gap Loans Structured?

Gap loans

Are structured. Are usually a second deed of trust behind a first deed of trust

A traditional private money loans goes 65-75% of the purchase price; the gap funds would come in as a second deed of trust behind that first lien

usually either a private money lender—an individual

is good for house flippers and contractors that may not have capital to put down

What happens?

gap lender is usually going to participate in some of the profit—anywhere from 30 to 50 to 60%; it varies depending on the skill level of the rehabber or flipper,