In this video, real estate investor Beau Eckstein tells us what a gap loan, or gap funding, is. They're also called Shared Appreciation Mortgages (SAMs).
A gap fund is a second lien against a piece of property, or real estate, that covers any additional funds a borrower needs in order to secure a property.
Private money gap lenders often take a piece of equity once the property is rehabbed and the first and second liens are paid off.
Because they are riskier loans, private money lenders will generally want a piece of the equity once all other loans are paid off to cover their risk.
For more on gap funding, give Beau Eckstein a call at 925-852-8261.