Preferred Equity and Mezzanine Debt

[@keia7065]

Thank you! The best explanation I've heard!

[@theadrianfajardo]

I appreciate the support. I'll keep making videos like this.

[@terrort8151]

Great explanation

[@theadrianfajardo]

Thanks @terrt8151!

[@legacyrydeshare3478]

Glad to be a new subscriber…

[@theadrianfajardo]

We're glad to have you! Let me know if there is a topic you would like me to make a video on

[@shameemnazeermd]

Thanks! Great explanation

[@theadrianfajardo]

I'm glad the video helped 👍

[@andrewrose7172]

Great explanation! So what is the hurdle rate that is in the PPM, what does that mean?

[@EnjoyingLife2025AD]

TY for explaining mezzanine debt in a real estate deal. My takeaway is that a city government should never agree to a mezzanine position when using taxpayer funds to redevelop a piece of real estate property. The risk of total financial loss is too high and not recoverable.Therefore, the redevelopment proposal should be rejected if this can't be negotiated out of the deal. I get it. 👍

[@theadrianfajardo]

Thanks for leaving a comment! Agreed. A mezzanine position is a creative strategy for making an opportunity work. However, there are times when it should not be used on a deal.

[@ginotarabotto]

Great explanation! Thanks. Curious, for a developer's personal equity, is it possible to have a friend/family put that money in? Wondering what solutions there can be if the developer doesn't have the money for the personal equity portion.

[@theadrianfajardo]

That is a possibility however I would advice reaching out to an attorney for the best way to structure your legal entity. Partnerships are the solution but the specifics have to be handled by a legal professional.