Jay Morrison| How To Raise Capital in Real Estate (2019)



this is a very important term the capital stack this goes down to the money the capital stack is how you put together all the pieces of money that you that are stacked up to complete your transaction so if it's a 100 million dollar project you might get a bank that says hey we're willing to give you 60% LTV loan to value 60% of the value so that means the bank will give you 60 million dollars 100 million that's more to half the battle so now you've got to pull together 40 more million dollars to pull this off but now it's easier to get the other 40 million when you can go to another banking partner or a funding partner or a private equity partner or cash or capital partner and say hey listen we already got 60% of our capital stack complete I need another 40 I'm looking to bring on XYZ partners for this and now maybe you get a private pension fund that gives you says that commits 20 million so looking if you get 20 million will give 20 million so now you got just 60 now you got 20 go a half year 40 now you got 20 more million you got a race now that other 20 million might come from host of different sources or places where you get to pull off the deal maybe the seller of the project says listen we'll give you a seller credit of 10 percent on the project or seller financing of 10 million over 10 years we paid back where XYZ person entries so now you've got the seller to contribute because you already got 70 percent the seller wants to created a deal so now you got a 10-year mortgage of seller financing 110 million now you got put we got 10 million yourself and now you might say look oh well I want to bring together 20 partners that can all put up $500,000 each and now you might go to some other people in your network outside your network and you might say you might go to a group and say hey listen I got a slot to 500 thousand each looking for 20 partners but you might find that 10 people got $50,000 each you can fill out one of those $500,000 slots you can do a small syndication told some people my point is the more you know about money people in the processes but none of those people will be willing to invest now I did a big deal at 100 million same thing goes for a million or a hundred thousand but nonetheless even be willing to participate in your syndication if you yourself are not knowledgeable and informed and you yourself don't have what look these appears to be a credible organization

9 thoughts on “Jay Morrison| How To Raise Capital in Real Estate (2019)

  1. Jay is my mentor..no he's not a scammer…I completed classes and you get your money worth… he's always be teaching…

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