The Gator Method in real estate investing is a short term financing strategy (popularized by Pace Morby) where a “gator lender” provides short term capital—often through transactional funding or similar lending—to help an investor/wholesaler bring money to the closing table for a real estate deal. It’s commonly used when you need to secure a property under a contract, cover an earnest money deposit (EMD) and/or the purchase price, pay closing costs, and then quickly resell to an end buyer (or execute a double close) so the gator lender gets repayment shortly after. It’s built for speed, not long-term holds: the entire method depends on having your exit lined up, understanding the fees and interest, and managing risk like delays, title problems, and unexpected holding costs.

For more details, keep reading.

What Is the Gator Method in Real Estate? (Definition, Who It’s For, and When It Shows Up)

If you’re asking what is the gator method in real estate, you’re usually looking at fast-moving real estate transactions where a wholesaler or investor has a strong deal under contract but needs capital to close.

In plain language, the gator method is a way for real estate investors (especially a wholesaler doing wholesaling) to bring in a private lending partner—the gator lender—to fund the “gap” so the investor can close the purchase and then resell quickly.

This method often shows up in:

• real estate deals that require a fast close

• situations where the seller wants proof you can perform

• transactions where you’re doing an assignment or a double close

• deals where the investor wants to do it without using their own cash or traditional financing

It’s related to creative financing because it’s not the standard “go get a 30-year mortgage” path. It’s also related to hard money in the sense that it can be expensive, short duration, and designed for speed—though the structure and underwriting can be different depending on the lender.

Where “gator” fits into the deal flow

The “gator” concept is basically: someone with capital “eats” the deal temporarily so it can move through closing—then gets paid back quickly when the end buyer funds the exit.

That’s why you’ll also hear this described with phrases like:

• transactional funding

• short-term bridge money

• double-close funding

• close-and-resell funding

The exact documents and structure matter, but the core idea is the same: short-term funding to enable closing.

How the Gator Method Works Step by Step (Contract, Title, Funding, Closing, Repayment)

Here’s a clean step-by-step outline of how using the gator method typically works. The details can vary by state, title company, and the lender’s rules, but the sequence below is the “common path.”

Step 1: Put the property under contract

You (the investor) get a property under a purchase contract with a seller at a price that leaves room for a profit. That purchase agreement will have:

• the purchase price

• timeline to closing

• buyer and seller names

• required earnest money (EMD)

At this point, you have a deal—but not necessarily the capital.

Step 2: Line up your exit: end buyer, assignment, or double close

A gator strategy works best when you already have one of these:

• an end buyer ready to purchase (common in wholesaling)

• a plan to assign the contract (and collect an assignment fee)

• a plan to double close (buy as A-B, then sell as B-C)

Even if you plan to assign, sometimes you end up needing to close (or the title company/seller requires it). That’s where gator funding often comes in.

Step 3: Title and closing coordination

The title company (or attorney, depending on how closings work in your area) will:

• open title and begin the title search

• gather documents and payoff info

• calculate closing costs

• confirm the amounts needed to close

This is a critical part of risk management because title issues can delay closing—and delays can increase fees, interest, or even kill the deal.

Step 4: Funding comes in (transactional funding / short term lending)

The gator lender provides funding—often for a very short period—so you can close. This is the “short term capital” component.

Depending on the lender, the funding may be structured as:

• transactional funding designed for same-day or next-day resale

• a very short-duration loan

• a form of hard money with strict repayment timing

The lender will usually charge:

• a fee (sometimes called points or flat fees)

• interest (depending on how the loans are structured)

• possibly additional costs tied to documents, wiring, or underwriting

Step 5: Closing + resale + repayment

You close on the purchase, then quickly sell to the end buyer. The lender then receives repayment from the resale proceeds (or from the end buyer’s funds), and you keep the remaining profit—minus:

• lender fees and interest

• title/escrow charges

• any other transaction costs

This is why the method is typically designed to be quick. The longer it drags, the more risk and cost you carry.

If you’re planning to move to Western New York, or if you’re already a local resident, understanding creative strategies in real estate investing is just one part of your life in Western New York. For more helpful tips on real estate and navigating purchases and sales, be sure to check out our latest blog on Carol Klein WNY Homes, where we cover local guidance and practical next steps for buyers and sellers.

Earnest Money, EMD, and the $5,000 Question: What the Gator Method Does (and Doesn’t) Cover

A lot of people first learn about gator funding when they’re trying to solve an earnest money deposit problem.

Earnest money deposit basics

Earnest money (often written as EMD) is the deposit you put down to show the seller you’re serious and to help make sure you’ll perform under the contract.

In some markets, an EMD might be small. In others, it could be 5,000 dollars or much higher. The number is less important than the principle: it’s cash you may need quickly, and it can be at risk if you default under the agreement.

Can gator funding cover earnest money?

Sometimes—but not always, and not automatically.

In practice:

• Some lenders will fund the full purchase for a double close but won’t fund the initial deposit.

• Some investors use other creative ways to handle deposit (partners, private money, negotiated deposit terms).

• In some cases, you’re still expected to bring EMD as “skin in the game,” even if the gator lender funds the closing.

So the gator method is more often a closing funding tool than an EMD tool—though the broader strategy often includes planning for earnest money as part of the system.

Managing earnest money risk

If you’re using a short-term financing strategy, protect yourself by:

• making sure the contract language is clear

• understanding contingencies (inspection, title, financing terms where applicable)

• keeping timelines realistic

• using reputable title/closing partners

Earnest money is one of the first points where newer investors underestimate risk.

Gator Method vs Hard Money vs Traditional Financing (And Why It’s Usually Short Term, Not Long Term)

It helps to understand where the gator method fits among other financing options in real estate.

Traditional financing (long term)

A traditional mortgage is designed for a long term hold:

• slower underwriting

• stricter borrower qualification

• lower interest than most short-term lenders

• not ideal for very fast closings or wholesale-style transactions

If your plan is to buy and hold for rental cash flow, traditional financing is often the end goal.

Hard money (short term, asset-based)

Hard money is typically:

• short-term lending

• higher fees/interest

• faster than banks

• common in fix and flip deals

Hard money often cares heavily about the asset value and the deal structure, and it’s frequently used when speed matters.

Gator method (transactional / rapid close-and-resell)

The gator method is usually even more time-sensitive:

• built around a fast purchase and resale

• frequently connected to wholesaling or double closings

• relies on the end buyer being ready and able to close

Because the timeline is tight, costs can be meaningful. You’re trading cost for certainty and speed. The strategy can work, but only if the deal spread (your expected profits) is wide enough to cover:

• lender fees

• interest

• extra title charges from a double close

• any surprise delays that create holding costs

Why cash flow isn’t the main point here

People sometimes mix up this strategy with long-term rentals. But the gator method is usually not about ongoing cash flow from rent—it’s about completing a transaction quickly so the capital gets paid back fast and the investor captures a spread (like an assignment fee or resale margin).