Will lenders consider mezzanine debt cash when making a CRE loandown payment?
Disclaimer: still very much in the baby stages of my learning in CRE investing.

Keeping things short, I’m curious about structuring deals using debt (likely mezzanine debt) from individual investors alongside a CRE loan to fund a deal. If a lender wants 70% LTV, would they care if the whole down payment came from mezzanine debt? Am I thinking about this completely wrong?

Any wisdom is very much appreciated.
[{"id": "ic0rnbq", "text": "Also any form of \u201cmezzanine debt\u201d is usually a 4 letter word to most investors. You may be able to structure something like preferred equity to fill out your capital stack.", "replies": [{"id": "ic1a1oa", "text": "Thank you for the response! Have you heard of a preferred equity structure set up to resemble debt in CRE? i.e. equity holders receive payment in the form of interest", "replies": [{"id": "ic1bbpn", "text": "Yes, it is common. I prefer capital gains for tax reasons, but it is often a coupon taxed as interest.", "replies": [{"id": "ic1xssd", "text": "Yes but you need to be careful with how it\u2019s structured. If it acts like debt and quacks like debt, investors/lenders will see what you\u2019re trying to do no matter what you call it.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ic15nst", "text": "No. \n\nMezz debt is still debt. It matters less to the senior lender because it's behind them in liquidation but you still have to service it. You also have to find a Mezz lender that reckless.", "replies": [], "depth": 1}, {"id": "ic244po", "text": "You\u2019re a little off track. Mezz will only get you to 85%, maybe 90%, so you will still need to raise equity. \n\nAlso, most mezz providers have a min of $2mm-$3mm. And mins of $10mm-$50mm aren\u2019t unusual. On the low end, that translates to a min deal size of $10mm-$14mm. \n\nAs far as \u201cwould they care\u201d? Smaller groups with say &lt; $20bn in assets, which is most regional &amp; local banks, usually won\u2019t allow mezz.", "replies": [], "depth": 1}, {"id": "ic3alyz", "text": "As a lender yes, we care. You as a borrower need to have \"skin in the game\" per se. If you come to me with a deal that was 100% financed, we wouldn't look at it.", "replies": [{"id": "ih7vrok", "text": "do lenders look down on someone using part of their heloc for a downpayment?\n\nHow do lenders actually discover what funds someone uses for a downpayment?", "replies": [], "depth": 2}], "depth": 1}]