How do real estate developers raise capital

Equity mezzanine funds for real estate

“Equity mezzanine is only for high earners” - wrong!

Especially with regard to real estate, the thought quickly arises that all types of financing or investments are aimed at high earners, as they simply have the necessary change to be able to invest in such projects in the first place - in contrast to normal earners.

However, this misconception can be effectively combated with the help of mezzanine funds for real estate. A mezzanine fund for real estate basically has exactly the same guidelines and rules as well as rights for the respective investors involved. However, with a mezzanine fund for real estate, it can be ensured that numerous different investors participate in a single project and in this way put the shares together in a pool - i.e. in the mezzanine fund for real estate.

The effect remains the same for the respective project planner, but there is much greater potential for the financing goals to be achieved in a much shorter period of time than if no mezzanine fund were used for real estate - the number of normal earners who invest successfully want by far exceeds the sum of high earners.

The advantages for the builder through mezzanine funds for real estate

Ultimately, the equity mezzanine enables financing that enables even newer builders to collect enough capital. At the same time, experienced project planners like to use the equity mezzanine with the help of mezzanine funds for real estate in order to be able to fulfill the respective financing in a very short period of time.

With regard to the positive effect on creditworthiness with the help of equity mezzanine, it can also be safely said that it is fundamental to have enough equity. On the other hand, it can turn out to be very difficult to get the total capital required for the respective project - after all, outside capital often takes up around two thirds of the total financing.

If you are generally interested in equity mezzanine in connection with mezzanine funds for real estate, we will be happy to answer any further questions you may have. You can reach us via our platform: Alternate Capital