Tonight, hard money lender Beau Eckstein tells us about gap loans and how they're structured.
Private money lenders, funds, and individuals can all put up money to fund loan gaps. Generally, hard money lenders fund from 65-75 percent of a construction or rehab project.
A gap loan comes into play when a real estate investor doesn't have any of his own capital to invest – in the case of gap loans, private money lenders assume more risk by filling in the 2nd deed of trust after the first lien on the property. For doing so, they often insist in sharing in the profits after a sale takes place.
For more on hard money gap funding, call Beau Eckstein at 925-852-8261