RCRE - Preferred Equity 101 with Rob Beardsley
Will Coleman and Mike Taravella Interview Rob Beardsley of Lone Star Capital Group Key Information: Preferred Equity is a hybrid product which is subordinate to the senior loan but has payment priority over common equity positions. Benefits of Preferred Equity include: Sponsors and developers are provided with a higher degree of leverage at lower cost than common equity. For real estate investors it also provides opportunity to capture a fixed rate of return prior to payment and can sometimes include upside. Preferred Equity offers a hybrid risk/return profile. In addition to payment priority over common equity, it provides some recourse provisions in the case of borrower default. Recourse provisions can include force of sale of the property and even take over of the property when certain triggers are hit. Investors can be attracted to the preferred equity dues to its predictable annual returns and regular distributions of debt investments. Expert Pro Tip: “Evaluate deals on a risk adjusted basis” Contact Information: [email protected] lonestarcapgroup.com Robbeardsley.me/books To register to invest with us: https://invest.randpartnersllc.com/invexp/accounts/login/ Rand CRE's Facebook: https://www.facebook.com/randcre Rand CRE's Linkedin: https://www.linkedin.com/company/randcre Rand CRE's Instagram: https://www.instagram.com/randcre
Jake & Gino: Real Estate Investing & Multifamily · Mike and Will
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Show Notes
Will Coleman and Mike Taravella Interview Rob Beardsley of Lone Star Capital Group
Key Information:
- Preferred Equity is a hybrid product which is subordinate to the senior loan but has payment priority over common equity positions.
- Benefits of Preferred Equity include: Sponsors and developers are provided with a higher degree of leverage at lower cost than common equity. For real estate investors it also provides opportunity to capture a fixed rate of return prior to payment and can sometimes include upside.
- Preferred Equity offers a hybrid risk/return profile. In addition to payment priority over common equity, it provides some recourse provisions in the case of borrower default.
- Recourse provisions can include force of sale of the property and even take over of the property when certain triggers are hit.
- Investors can be attracted to the preferred equity dues to its predictable annual returns and regular distributions of debt investments.
Expert Pro Tip: “Evaluate deals on a risk adjusted basis”
Contact Information:
To register to invest with us:
https://invest.randpartnersllc.com/invexp/accounts/login/
Rand CRE's Facebook: https://www.facebook.com/randcre
Rand CRE's Linkedin: https://www.linkedin.com/company/randcre
Rand CRE's Instagram: https://www.instagram.com/randcre
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About Jake & Gino: Jake & Gino are multifamily investors, operators, and owners who have created a vertically integrated real estate company. They control over $350M in assets under management. Connect with Jake & Gino here --> https://jakeandgino.com.
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