When the deal is right but the capital is short.
Private equity capital for Texas real estate — the same asset-based underwriting as hard money, funded from private and institutional balance sheets instead of a retail bank. Built for the gap between what senior debt covers and what your deal actually costs.
How much equity does this deal actually need?
Model your senior debt, your own cash and the private equity that fills what's left — plus the preferred return and profit split that capital will expect on the way out.
Illustrative model only. Total project cost is assumed to exclude financing costs, which are shown separately. Structures vary widely by sponsor, asset and capital partner. Not an offer of securities, an investment solicitation, or a lending commitment.
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Same underwriting as hard money. Different source of funds.
If you've used a fix and flip loan, this will feel familiar — the property and the business plan carry the file either way. What changes is whose balance sheet the money comes from, and therefore how far it will stretch.
Private equity, hard money and the bank
Most real deals use two of these together. The question is never which one is best — it's which combination gets your project funded on your timeline.
Structure My Deal| Private Equity | Hard Money | Conventional | |
|---|---|---|---|
| Position | Behind senior debt | First lien | First lien |
| Underwrites | Deal & sponsor | The property | Your income |
| Cost of capital | Highest | High | Lowest |
| Cash you must bring | Least | Moderate | Most |
| Speed | Weeks | Days | 30–45 days |
| Typical use | Filling the gap | Acquisition + rehab | Long-term hold |
| Return structure | Pref plus profit split | Interest + points | Interest only |
Project types that fit private capital
Structuring capital for sponsors across Austin, Round Rock, Georgetown, Cedar Park, Leander, Kyle, Buda, Pflugerville, Hutto, Killeen, Temple and San Antonio.
From deal memo to funded
Private capital moves on preparation, not urgency. The sponsors who get funded are the ones whose numbers survive a second read.
Start Step OnePurchase price, budget, projected exit, timeline and what you're bringing. Capital partners read the business plan before they look at the property.
Cheaper capital goes in first. Only once the senior loan is maxed does it make sense to price the equity that fills what remains.
Preferred return, profit split, control rights and what happens if the project runs long — negotiated before anyone signs, not discovered at the exit.
Draws run against the senior facility, the project executes, and proceeds distribute down the waterfall at sale or refinance.
What private equity real estate financing actually is
Private equity in real estate simply means capital that comes from private investors, funds or family offices rather than from a depository bank. It behaves less like a loan and more like a partnership: instead of a fixed interest rate secured by a first lien, the capital takes a position behind the senior debt and is compensated through a preferred return plus a share of the project's profit. Because the money is private, the guidelines are written by the people writing the check — which is why the underwriting feels so familiar to anyone who has closed a hard money loan.
Why the underwriting mirrors hard money
Both hard money lenders and private equity partners are asset-based decision makers. Neither one averages your tax returns or calculates a personal debt-to-income ratio. Both are reading the same four things: what the property is worth today, what it will be worth when the plan is executed, whether the budget and timeline are credible, and whether the sponsor has done this before. The difference is position and price. A hard money lender is first in line and takes the lowest return; private equity sits behind that lien, carries more risk, and prices accordingly. Understanding that hierarchy is the whole game — you always fill the cheapest layer first and only reach for equity to close what remains.
The capital stack, explained plainly
Think of a project's funding as a stack. At the bottom sits senior debt: the largest, cheapest and safest layer, secured by a first lien. Above it sits mezzanine debt or preferred equity, which costs more and carries more risk. At the top sits common equity — your money and your partner's — which is paid last and therefore demands the highest return. When proceeds arrive at sale or refinance, they flow back down that stack in reverse: senior debt is repaid, then the preferred return is satisfied, then whatever remains is split according to the agreement. That order is called the waterfall, and it matters far more to your final number than the headline rate on any single piece.
Preferred return and profit splits
Most private equity structures pay the capital partner a preferred return first — an annualized rate accruing on their invested balance before either party sees profit. Once the pref is satisfied, remaining profit splits between sponsor and partner on a negotiated basis. Sponsors with a track record command better splits; first-time sponsors typically give up more of the upside in exchange for access to capital they could not otherwise reach. The calculator above lets you model both variables so you can see exactly what a five-point difference in the split does to your take on a real project.
When private capital is the wrong answer
Equity is the most expensive money in the stack, and it should be the last money you reach for. If a conventional loan or a straightforward hard money facility fully funds your project, adding an equity partner just gives away profit you did not need to share. Private capital earns its keep in exactly two situations: when the deal is larger than your own cash can support, or when preserving liquidity to run additional projects is worth more than the share you give up. We will tell you plainly when a deal does not need us.
What sponsors should have ready
A credible package moves faster than an urgent one. Have your purchase contract, a line-item budget with contractor bids, supporting comparable sales or rent comps, a realistic timeline including permitting, your track record on similar projects, and a clear statement of how much you are putting in. Capital partners are evaluating you as much as the property — the sponsor who anticipates the second question is the one who gets funded.
Private equity financing FAQ
Bring us the deal you can't quite fund yet.
We'll size the senior debt, model the equity gap, and tell you honestly whether the project supports the cost of the capital it would take to close it.