Tips for funding an entire deal with OPM?
I'm new to the industry and have found great mentor.  Our business is expanding really quickly and we have more opportunities than funds to take down the deals.  My role is mainly in going out and finding more deals; recently, because we have 3 townhome projects than need funding sooner than later, I've been asked to step into a role of raising funds.  We can very easily get the debt loan from a bank at 75% LTV.  We have more difficulty raising the equity side of the loan.  We have been offering hard money "fixed" rates, or the option of an equity partnership, or a blend of the two.  


I'm very new to going out and raising hundreds of thousands of dollars, and raising it as the equity piece requires more risk for the lender, because they would effectively be sitting in 2nd place behind the bank portion of the loan.  What can I do to make this more attractive to the potential money partners who are funding the equity side of things?  We are specifically doing value add opportunities and make sure to only take on projects that have very managable or low levels of risk.  What else can we do to create value and bring these type of opportunities to people who want to put their money to work?  


If it matters, my partners have a good track record and 7 years of experience.  Our specific niche is value add small apartments and paper/permitting development deals to later sell off to builders.
[{"id": "eevu5le", "text": "If your mentor is not your equity, I hope he\u2019s educating you and, more importantly, allowing you to build a track record. \n\nThe quality of your equity will be contingent upon your mentor\u2019s track record. Does he have equity partners he\u2019s work with in the past?", "replies": [], "depth": 1}, {"id": "eevz2d4", "text": "An equity investor knows he is behind debt in the capital stack. If you have to educate them at that level, you don't want their money. ", "replies": [], "depth": 1}, {"id": "eew1aa7", "text": "Give the other investors a preferred return up to X multiple, X IRR, or X $ amount. You don\u2019t get anything until they get their return and then you get a disproportionate amount above.", "replies": [], "depth": 1}, {"id": "eeycewp", "text": "The guidance &amp; advise previously provided is sound and accurate.  There are firms out there like ours, that provide capital formation services for qualified sponsors. The only other piece of guidance I would provide is to start looking for capital (equity in particular) well before you need it.  The most important thing to do is develop and build relationships with retail investors, know what their investment parameters and risk tolerance is before you pitch them a deal. You wouldn't propose marriage on the first date (at least you shouldn't) so don't pitch a deal on the first call.", "replies": [], "depth": 1}]