Five ways to solve the equity gap

Partner equity is usually through a GP-LP structure. A capital partner contributes the down payment in exchange for preferred return, and the operator runs the asset. This is how operators with strong deal finding and operational skills but limited capital get their first deal done. The economics need to be modeled carefully though. The preferred return comes off the top before the operator participates. So you can use, um, also you can use cash-out refinance. On another asset. If you own other real estate with equity, cash-out refi extracts that equity for the down payment. You're going to need a clean source of funds documentation there. Just document everything that you're doing. The new debt service on the refinanced property will likely affect your personal DSCR calculation though as well.