Christian Osgood breaks down how to structure deals: find the opportunity first, then pick your debt product (bank loan, seller finance, DSCR), then raise the remaining equity. Debt covers 75-100% of capital. Most people get it backwards, chasing money before they have a solid deal.
Chapters
At the end of the day, it's deal, debt, equity. Is there an opportunity that we, that we love, that we believe is going to make money and have a reason to think that? What debt products are available? Imagine it like a dropdown box. You literally click the little down arrow. It's like, hey, this particular deal, we could do seller finance, we could do bank finance, we could do a DSCR loan, or we can use private equity. Whatever the opportunity is for it, that's most of your— that's your deal and most of your money right there. That's going to be 75 to 100% of your money. Some deals are just deal, debt, done. If you have to bring some money down, you find for that last little 25%, 10% they have to raise, like, okay, we're almost done with the deal. We have an opportunity, we have a path for it to make money, we have a debt product selected. It is so easy to find the last bit of capital when you have a great opportunity. I think where people start creative finance backwards is they go, I need to understand where my money is first. Your money is in the deal.