If you’re reading this, it’s likely you want to get started in real estate investing.
But…
You’re wondering if you need a lot of capital – maybe even six figures or more – before you make money in the industry.
So, is that true?
The Gator Method says it’s not true at all.
The Gator Method is a creative way to think about real estate investing that helps wholesalers, investors and even total newcomers make money – even if they’re starting with $2,000 or less.
Interested to see how it works?
Keep reading to find out more!
Can You Get Into Real Estate Investing With Under $2,000?
Most people interested in real estate investing get drawn to wholesaling.
If you’re not sure what wholesaling is, here’s a quick explanation.
Wholesaling in real estate involves finding properties, securing them under contract, and then assigning that contract to another buyer for a fee.
It’s appealing because you don’t need six figures to buy the property outright.
You’re essentially the middleman who connects motivated sellers with cash buyers, profiting from the assignment of the contract. Unlike traditional real estate investing, wholesaling allows you to make money from deals you don’t actually own.
However, wholesaling still requires some capital.
Here’s why:
- Earnest Money: Often, sellers require a small deposit, called earnest money or an EMD (Earnest Money Deposit), when signing the contract. This deposit shows that the wholesaler is serious. It’s usually sent to escrow and is refundable, but it does require upfront capital. The amount can range from $100 to $5,000 or more, depending on the size and terms of the deal. While earnest money is considered a minimal cost in real estate, it can still be a hurdle for new investors without liquid funds.
- Marketing: Real estate investors need to spend money on marketing to find both sellers and buyers. Wholesalers, in particular, need to generate leads to find distressed properties or motivated sellers willing to part with their homes at a discount. This can involve direct mail campaigns, online ads, bandit signs, or even hiring virtual assistants to help with cold calling. Marketing is usually a lower cost han the EDM on a single deal, nut it’s still an important cost. Without leads, you won’t find the properties needed to lock in deals.
- Transaction Costs: Depending on the structure of the deal, you might need funds to cover closing costs, even if only temporarily before flipping the contract. Although the wholesaler often doesn’t hold the property for long, these transaction costs can include fees to title companies, legal fees and sometimes holding costs if they need to wait to assign the contract.
- Buy and Hold: Sometimes, if the wholesaler can’t find a buyer in time or if the contract requires it, they may need to close on the property themselves. In these cases, they’ll need access to additional funds, possibly through hard money loans. This scenario creates the potential risk of being stuck with a property they didn’t intend to hold, adding pressure to secure quick financing or face the risk of defaulting on the deal. With proper contacts and protection, you shouldn’t end up in this situation – but it’s a hazard to be aware of.
So what do you do?
Should you give up on real estate investing?
Definitely not.
Real estate has long been a proven path to financial stability and wealth.
People always need homes, and real estate provides a reliable investment opportunity, even in times of economic uncertainty. The key is finding creative ways to overcome the capital barrier.
Keep reading to find out how you can solve this issue and invest in real estate with little money.
Understanding The ‘Gator Method’ In 3 Simple Steps
The answer you might be looking for is the ‘Gator Method.’
This method has been around for decades, but it was recently popularized by Pace Morby, a real estate investor and educator.
The Gator Method helps solve one of the biggest bottlenecks new real estate investors face: coming up with the money needed for EMD.
There are two ways you can use the method:
- Find ‘Gator Lenders’ to lend you the EMD.
- Become a ‘Gator Lender’ and lend EMD to others.
The Gator Method is about more than just transactional lending; it’s about finding creative ways to solve funding challenges that could otherwise prevent a deal from moving forward.
But EMD is the most common application.
Let’s break down the method in three simple steps.
Step 1: The Deal
The first step in the Gator Method starts when a wholesaler has a deal.
In real estate wholesaling, this means the wholesaler has identified a seller who wants to sell and a buyer who is ready to purchase the property.
The wholesaler works as the intermediary, negotiating terms with the seller and preparing to assign the contract to the buyer.
Once both parties are lined up, they’re ready to sign contracts.
If you’re a new investor, this might sound daunting.
How do you find these deals in the first place?
The key is networking, lead generation, and understanding your market. Many wholesalers start by focusing on distressed properties – homes in foreclosure, inherited properties, or properties owned by sellers who are motivated to sell quickly. (More on this later.)
You also need to develop relationships with real estate agents, investors and title companies to get to this stage efficiently.
But once you have a deal lined up, the next step is critical: securing the EMD.
Step 2: The EMD
Here’s where the problem comes in.
The wholesaler doesn’t have the EMD money, and the buyer doesn’t want to pay the EMD until the title is cleared.
This creates a catch-22 for the wholesaler.
The earnest money deposit can range from $100 to $1,000, but it can also be as high as $5,000 or more. It’s usually around 1% of the transaction price, so if you’re dealing with a $300,000 property, the EMD could be $3,000.
In competitive markets, the seller often expects the EMD to be higher to show the wholesaler’s commitment to the deal.
The wholesaler needs to close the deal fast.
But if you don’t have the money for the EMD, what can you do?
This is where the Gator Method comes into play. The wholesaler can find a ‘Gator Lender’ who is prepared to lend them the EMD, solving the problem of not having enough upfront capital.
If you’re the one who secured the deal, you need to go out and find a gator who’ll lend you the EMD. This is typically done through real estate networks, forums, or even personal connections.
If you’re the gator, you put up the EMD money, and the deal moves forward.
Step 3: Close The Sale
Usually, the wholesaler and the Gator Lender will have paperwork in place to protect the gator’s money. This is key because the Gator Lender needs assurance their funds are safe if the deal doesn’t close.
These agreements often outline how and when the gator gets paid back, as well as any profits or fees they’ll earn from the transaction.
But assuming the deal closes…
The wholesaler makes money from assigning the contract to the buyer, while the gator lender earns a predetermined fee or percentage of the deal.
For example.
Let’s say the wholesaler profits $25,000 from the deal and the Gator Lender earns $5,000 for putting up the EMD (plus their initial EMD back).
But the payout can come in many forms.
The gator lender might secure a share in the assignment, reap benefits from a fix-and-flip venture, tap into the equity of a deal, or gain from the cash flow generated by the property.
It’s a win-win situation that allows both parties to profit from the deal without requiring the wholesaler to have a large amount of upfront capital.
Why Not Take Out A Loan Instead Of Using A Gator Lender?
Some might argue that instead of using the Gator Method, you could simply take out a loan from a hard money lender and pay interest on the money borrowed.
But traditional financing comes with its own set of challenges.
Hard money lenders often require extensive paperwork, credit checks, and a time-consuming approval process. They may also charge higher interest rates, cutting into your profits.
More importantly, time is critical in real estate investing.
Deals can fall apart quickly if you don’t have the funds ready when needed.
With the Gator Method, you get the EMD money immediately, without jumping through hoops, allowing you to close the deal on time and take advantage of the opportunity. The speed and flexibility of the Gator Method make it a powerful tool for both new and seasoned real estate investors.
It’s like being a scavenger – taking advantage of opportunities that others won’t touch.
And that’s exactly where the name “Gator” comes from.
Two Ways To Apply The Gator Method
There are two main ways to get involved in the Gator Method:
- As a Wholesaler: Before reading this, you might not have known about the Gator Method as a way to quickly get cash for EMD to close deals. Now, you can go out, find sellers, buyers and close deals without using your own money. You can join real estate investing communities to find gator lenders or even tap into your network of friends or family to get started. (Just make sure to have legal protection and insurance in place for peace of mind.) You can also use the Gator Method on yourself. Open an LLC using Professional Corporate Services (PCS) and secure a line of credit to finance your own deals. Pay back the borrowed amount within the few days you need to wait for the title to clear.
- As a Gator Lender: You can become a Gator Lender yourself. Sometimes the EMD is only $2,000 or less, so if you have that available, you can make a decent payout in just a couple of days or weeks while waiting for the title to clear. It’s a low-barrier way to get into real estate investing without finding the deals yourself. But you need to build relationships with wholesalers to get in the position where they approach you for capital.
Interested In Wholesaling Real Estate Deals That You’ll Finance With The Gator Method?
If you’ve read this far and you’re interested in finding deals and using the Gator Method to fund your EMD, you’re not alone.
The Gator Method has helped countless new real estate investors realize that they don’t need a lot of capital to become a wholesaler.
hey just need a deal.
So, how can you get a steady stream of deals to start making money?
1. Generate Leads
Your core value as a wholesaler is finding seller leads.
You need to identify distressed properties or time-pressured buyers willing to accept a quick cash offer.
One of the simplest and most effective ways to generate these leads is through real estate postcard mailing strategies, such as those from Ballpoint Marketing.
Their Mystical Postcards cost as little as $0.65 each, making it affordable to mail 500 homes for just $325.
To help you find motivated sellers, read this post from Ballpoint Marketing.
2. Live Call Answering
Imagine mailing out to motivated sellers, and your phone starts ringing off the hook.
But what happens when it rings while you’re asleep or tied up in another deal?
This is where Call Porter can help.
Call Porter is the best answering service built for real estate investors. We’ll answer your calls, qualify your leads, and book appointments for you – without you lifting a finger.
Click here to listen to actual conversations with Call Porter reps to get a feel for the service.
With these two methods, you’ll have a steady stream of deals without a huge investment of time or money.
Conclusion: Using The Gator Method To Close Deals Fast
The Gator Method isn’t just about lending money – it’s about solving the overlooked parts of real estate transactions that scare off many newcomers.
If it’s not the EMD, it could be probate fees or any number of problems that require capital you don’t have.
The Gator Method emphasizes joint ventures that create win-win solutions.
Has this post given you renewed hope to get into real estate investing?
Thousands of others have used to it go from under $2,000 to making five figures a month within their first year of getting started.
Just remember!
When you expand your operations and get more leads calling than you can handle, don’t forget to leverage Call Porter to ensure you never miss a hot lead.