Real Estate Financing



Real estate financing is debt secured by a first legal charge on income-producing or development property. It’s the most established form of asset-secured capital: the property is the collateral, the rental or sale proceeds are the exit, and the lender sits first in line. Deal sizes run from around $1M up to $500M+, with terms that look a lot like institutional commercial mortgages — but structured through private capital channels.

The 80/20 model

The standard structure funds up to 80% of property value (or project cost) through the facility. The borrower brings the remaining 20% as equity, held at a regulated institution as proof of funds. The lender takes a first legal charge — meaning on default, they recover first, from the sale of the property. That priority is what justifies a lower rate than unsecured options.

What “seasoned” really means

Private real estate lenders don’t fund first-time sponsors on speculative deals. “Seasoned” is shorthand for a track record the lender can verify:

• 3–5 comparable completed projects — same asset class, similar scale. A sponsor who’s done three multifamily renovations can get a multifamily loan; a sponsor who’s only done single-family flips usually can’t.
• Audited financials for 3–5 years — clean, verifiable books.
• Clear title on the collateral property.
• A credible exit — a refinance into permanent debt, a sale, or stabilized cash flow that services the loan.

The timeline

From complete documentation, expect roughly 3–4 months to close. The bottleneck is diligence: title, appraisal, environmental (for some asset classes), sponsor background, and the audited financials. Once those clear, the facility documents move quickly. This is not bridge capital — it’s term financing for a real project.

Use cases

• Acquisitions — buying an income-producing property using debt.
• Development — funding construction with a refinance or sale as the exit.
• Refinance — pulling equity out of a stabilized asset to redeploy.

Real estate financing rewards the sponsor who can prove they’ve done this before. The 80/20 split, the first charge, and the “seasoned” requirement are all the lender’s way of saying: show me you’ve closed this exact kind of deal, and I’ll give you institutional-style money.

How it combines with JV capital

Real estate debt covers up to 80% — but that 20% equity gap is often the hardest part to fill. That’s where a JV equity layer comes in: private partner blocks fund the 20% (and any mezzanine gap), accruing a preferred return, while the first-charge debt handles the bulk. The property’s cash flow services the debt; the trigger event (refinance or sale) pays out the JV partners and returns their capital.