Gator Lending? Why? 🐊

[Steven Greenwalt]

Hey Everyone, 

Newbie here trying to get some clarity on "gator" lending. I know, it's the flavor of the day, but it at least got me to to perk up. That said, I'm either missing something or this is another snake oil scheme. So the question is - why would someone entering a deal/assignment need a gator to cover EMD?

Let's say EMD is only between $2,000 and $5,000, depending on the deal. From my POV, it worries me that the person with this deal/assignment doesn't A. have $2k - $5k free for EMD OR B. Is willing to add another person (the gator) to this transition, further complicating it for only $2k - $5k + gator fee.  

What am I missing here?