Not enough cash to buy
The lender requires $40,000 toward the purchase but the investor has $20,000. Ask: “How much are you required to bring at closing?”
DSN Investor Education · Lesson 1
Creative Deal Structuring
Short on cash for a real estate deal? Before searching for another loan, find out what is causing the shortage—and when the money is actually needed.
Smarter questions. Better decisions.Start here: A funding gap is a symptom, not a diagnosis. A purchase shortfall, a renovation-budget shortage, and a reimbursement delay are different problems.
5 types of funding gaps
Repairs exceed the budget
The lender approved $60,000 in repairs but updated estimates total $85,000. Ask: “Does the approved budget cover the actual scope of work?”
Fees push cash-to-close higher
Down payment is covered, but title, lender fees, and insurance require another $7,000. Ask: “Is the shortage in your down payment or closing costs?”
Approved money arrives later
Renovation funds may be reimbursed after work and inspection, but the contractor wants an advance now. Ask: “Is the money missing, or just not available yet?”
Not enough cushion for delays
Extra months of insurance, utilities, interest, or holding costs weren't budgeted. Ask: “What cash buffer do you have if the project runs long?”
Try the Funding Gap Calculator
Use this simple worksheet to estimate a total project funding shortfall. This is not the same as cash needed at closing.
Include only confirmed, usable financing. Don't double-count funds or assume a renovation draw is available immediately.
ESTIMATED TOTAL PROJECT SHORTFALL$30,000
Project budget exceeds identified funding.
Total project cost$260,000
Financing + investor cash$230,000
Important: This calculator does not calculate cash-to-close or model loan draws. Ask your lender and title company for the closing statement and disbursement schedule to understand when cash is needed.
Work through an example
A flipper budgets $200,000 for purchase, $50,000 for repairs, and $10,000 in costs and reserves: $260,000 total.
The investor has $205,000 of committed financing and $25,000 in project cash. The estimated total shortage is $30,000.
But ask one more question: Is the $205,000 fully usable at closing, or is part of it reserved for renovation reimbursements? A separate timing shortage may still exist.
Ways a deal may need less GAP funding
The right option depends on the type of shortfall and the lender's rules.
Improve the purchase terms
Explore an appropriate price reduction or permitted seller-paid closing costs.
Compare primary financing
Understand loan-to-cost, loan-to-value, rehab-draw timing, fees, and cash-to-close requirements.
Consider an equity partner
An investor and capital partner might share costs and profits, subject to lender approval and legal review.
Explore seller financing
Only if the seller agrees and the primary lender permits the structure and required disclosures.
Not a shortcut: A double close may solve a wholesaler's short-term purchase funding problem, but it does not replace an end buyer's required financing.
Five questions to ask before seeking more money
- What exactly are you short on: purchase, repairs, closing costs, timing, or reserves?
- How much is required, and on what date?
- How much financing is actually approved, and when can it be drawn?
- What purchase terms or costs have you already reviewed?
- Would the primary lender approve any proposed alternative funding structure?
Networking practice: An investor says “I'm $35,000 short. Do you know a GAP lender?”
Try: “I don't offer GAP lending, but I'm curious what's causing the shortage. Is it your down payment, renovations, or the timing of a lender draw?” Then ask how much is needed and when.
Networking practice: “My lender approved $70,000 for repairs, but I need $15,000 today.”
Likely a timing gap if the $70,000 is funded through reimbursement draws. Confirm payment and inspection terms before assuming financing is missing.
Having trouble getting a deal closed?
Deal Support Network helps investors understand closing challenges and explore available transactional funding services and professional resources. DSN does not offer GAP lending.
Contact DSN About Your Deal →
For available transactional funding and general transaction support—not GAP lending.