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  • Writer's pictureREI Gap Funding

Miami Real Estate Gap Funding

Updated: Feb 10, 2022

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What is Real Estate Gap Funding?

Miami Real Estate Gap Funding is essentially an interim loan used to temporarily provide financing for an individual until they can secure a more permanent solution. Otherwise known as a bridge loan, gap funding is traditionally used to “bridge the gap” between the moment a borrower needs money and when they can secure a long-term loan.


Due, in large part, to their short-term nature, gap loans are traditionally used by borrowers who are simultaneously waiting for long-term financing to clear and need money to cover immediate expenses. It’s become an excellent tool for anyone who needs access to capital while waiting for a subsequent loan to transpire. As a result, more and more real estate investors are starting to take advantage of gap lending and the benefits it may provide between deals.


WHEN SHOULD YOU USE GAP FUNDING?


Miami Real Estate Gap Funding has proven invaluable to countless investors. Quick and easy access to cash can’t be underestimated, especially in a market as competitive as today’s. It is worth noting, however, that real estate gap funding isn’t necessary for every deal. Not unlike every other type of funding, there is a time and a place where gap funding makes sense. More specifically, gap funding should be used when:


  • For projects likely to realize sizable returns.

  • Investors want to maintain more liquidity.

  • There isn’t enough cash on hand to close a deal.

  • Transitioning to a bridge loan can reduce interest payments from the initial loan.

  • Cash reserves are needed to complete any unfinished construction projects on the subject property.

  • Interest payments are building up due to the deal taking longer to close.

  • Investors need to keep enough cash on hand in the event another deal presents itself.

Gap funding has developed a reputation for supplying borrowers with immediate access to capital. It is worth noting, however, that gap funding is more than a source of money; it’s a tool used by countless investors to facilitate deals they may have otherwise had to pass on. That said, gap funding isn’t without its caveats; there is a right and a wrong time to use it. Therefore, it’s in everyone’s best interest to learn everything they can about gap lending before committing to it.


Set up a free consultation today and find out if a Gap Funding is right for you and your business.


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