Tuesday, April 1, 2008

Addressing Joint Venture and equity

In general , 100% financing deals dont work. On the rare deal that does make sense, it becomes a partnership. The lender will always take the approach of " why do a need a partner to finance 100%, i'll just buy the deal". Now it doesnt really happen like that, but thats why its better to partner with clients who already own the property or can put at least 10% into any deal.

equity partners on average will put 10-20% of the required capital in a real estate deal.

100% financing may work with a land owner who has enough equity that a 100% loan to cost on some sort of a development makes sense