How does an equity deal differ from debt or investment sales?
Hi, I'm a young debt broker and a client lamented to me that its so hard to find equity. Would love to help but the problem is I've never done an equity deal. How does equity placement differ from debt brokerage (what I do now) or investment sales?

In this case, the project needs LP's for value-add MF, less than 100 units. I'm hoping to secure his equity partner then also source the debt on the property.
[{"id": "ihf1tar", "text": "Well the debt piece is super simple, right? Can the debt service be covered, that's it. The equity is a whole other ballgame, who wants to buy the real estate with you? This comes with a whole set of agreements to guaranties, monitoring and execution. How much construction is on this deal?\n\nI would not trust a developer or GP that doesn't have the pre-existing relationships with an LP on your first equity deal. It's... Too much to ask/source for the parties to get into bed together on a smaller deal like this.", "replies": [], "depth": 1}, {"id": "ihfknep", "text": "Is he lamenting about equity in general or equity on this deal? If you're already looking at it from the debt side is it a big stretch on some aspect that would scare off investors?", "replies": [], "depth": 1}, {"id": "ihfog5t", "text": "1. Equity placement is much more relationship based than debt placement, especially if you are talking about straight Common Equity.\n2. There are several equity structures and different ones may be preferred by different investors. Within common equity, you have JV (an equity source coming in as an equal partner and sharing in deal fees as alongside the sponsor) and LP (passive source of capital). Or an equity source can be Preferred, which would typically sit between debt and sponsor equity, and have a Preferred Return.\n3. Equity providers are keying in on different metrics than Debt. You'll be touting Cash on Cash Return, IRR, and Equity Multiple to drive interest with equity sources.\n\nMy company does both debt and equity placements nationwide. Feel free to DM.", "replies": [], "depth": 1}, {"id": "ihjhnsx", "text": "How big is the equity check? I'm making assumptions but under 100 units sounds too small for most JV equity.. Imagine a $10m deal with 65% senior debt, has a $2m pref check at 85% and JV equity of $2.5m at 90%...\n\nProbably going be Pref Equity up to 80-85%..there are a few small balance groups that aren't intermediaries, but it's very difficult to place equity, even pref under $3m.\n\nAnd then there's the issue of local experience and track record. 1st, 2nd and even 3rd deals in a given market are difficult to secure single check investments. \n\nThat leaves friends and family style syndication.\n\nI'd also add that I've seen other broker groups reverse your approach and lock down the debt placement with a promise to try and find equity. Inless you have real connections, equity will leave you chasing your tail without reward and most sponsors are mercenary on this. Place the debt..control the deal, lock in your fee, use company (and lender analyst) resources to backup-underwrite and vet the sponsors/property/plan..then start non-exclusively introducing equity capital..just my 2 cents.", "replies": [{"id": "ihkbr0p", "text": "I'm new to this, how can you lock debt placement first and than find equity? Wouldn't that be considered a fund?", "replies": [{"id": "ihkl45k", "text": "Lock in your position with the sponsor to broker the debt for a fee. Get an exclusive agreement signed.\n\nIf you are new, you may need help. It's too crazy out there with lenders and the markets. Depending on the type of debt needed it's very difficult right now.\n\nI think I understand your last question but can you explain what you mean by being \"considered a fund\"?", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ihnlach", "text": "Equity is much harder to find. Very relationship based especially if common equity/JV. A bank wants to make sure they aren\u2019t losing their money and the payments are made and that\u2019s all they expect. Equity is more concerned about how much high their return and more of the day to day. Sponsorship and track record very important. Guarantees and carve outs etc etc", "replies": [], "depth": 1}]