Preferred Equity for Multifamily Operators
Unlock Capital Without Refinancing Your Portfolio
Fill equity gaps to close deals
Structure capital for complex or transitional assets
Access liquidity without touching existing debt
Designed for operators scaling in today’s market
Built For Operators
Who This Is For
- Multifamily operators actively acquiring or repositioning assets
- Sponsors with capital tied up in existing deals
- Owners who don’t want to refinance low-rate debt
- Operators raising equity deal-by-deal and hitting limits
- Sponsors navigating recapitalizations, buyouts, or capital gaps
Where Deals Break
Most deals don’t fail because of the asset.
They stall because of the capital stack.
Common situations:
- Short on equity to close
- Equity tied up across existing assets
- Debt doesn’t stretch far enough
- Partnership or recap situations
- Projects that need capital but don’t fit traditional lending
How We Structure
Capital Built Around the Deal
We structure preferred equity and mezz solutions that:
- Sit behind senior debt
- Fill gaps without forcing a refinance
- Align with your business plan and timeline
- Provide flexible capital where it’s actually needed
We are not tied to one structure.
We match the capital to the situation.
Deal Snapshot
Deal-Level Preferred Equity (Fill the Gap)
Deal-Level Preferred Equity (Fill the Gap)
The Situation
Deal Type: Value-add multifamily acquisition
Purchase Price: $4.2M
Challenge: Sponsor short ~$800K in equity to close
Structure: Preferred equity behind senior loan
Outcome: Closed on time without raising full LP stack
Who It’s For
- Operators short on equity to close
- Sponsors raising capital deal-by-deal
- Time-sensitive acquisitions
Where Deals Break
- LP capital not raised in time
- Equity gap between loan and total project cost
- Delayed closings
The Solution
- $500K – $1.5M preferred equity
- Short-term (12–24 months)
- Sits behind senior debt
- Structured for speed and execution
Deal Snapshot
Participating Preferred Equity (Recap / Complex Deals)
Participating Preferred Equity (Recap / Complex Deals)
The Situation
Deal Type: Value-add multifamily reposition
Project Size: ~$6M basis
Challenge: Asset underperforming, needed capital + flexibility
Structure: Participating pref with flexible payments + upside
Outcome: Stabilized asset and avoided forced sale
Who It’s For
- Operators in recap or partnership changes
- Heavier value-add or transitional deals
- Sponsors needing flexible capital
Where Deals Break
- Debt too restrictive
- Cash flow pressure during reposition
- Partnership or capital stack misalignment
The Solution
- $1M – $5M investments
- Flexible current pay (low or none)
- Preferred return + profit participation
- 2–5 year horizon
Deal Snapshot
Portfolio-Level Preferred Equity (Unlock Liquidity)
Portfolio-Level Preferred Equity (Unlock Liquidity)
The Situation
Deal Type: Stabilized multifamily portfolio
Portfolio Size: ~$25M+
Challenge: Equity tied up, slowing new acquisitions
Structure: Portfolio-level pref based on cash flow
Outcome: Accessed ~$2M+ liquidity without refinancing
Who It’s For
- Operators with multiple assets
- $50M+ portfolios (ideal)
- Sponsors scaling acquisitions
Where Deals Break
- Equity trapped in existing assets
- Reluctance to refinance low-rate debt
- Slowed acquisition pipeline
The Solution
- Portfolio-level underwriting
- Based on actual cash flow
- No refinance required
- Functions like a revolving equity facility
More Scenarios & Case Studies
Need To Close Fast?
Need To Refinance?
Ready to go vertical?
Ready to go Horizontal?
Got Land Equity?
Build & Hold?
WHY OPERATORS USE PREF
Why Not Just Refinance or Raise Equity?
- Refinancing resets favorable loan terms
- Raising LP capital slows down execution
- Traditional lenders don’t structure for flexibility
Preferred equity allows you to:
- Keep existing debt in place
- Move faster on opportunities
- Maintain more control of your deals
- Structure capital around reality not guidelines
FAQ
What is preferred equity in real estate?
Preferred equity is capital that sits behind senior debt but ahead of common equity, used to fill gaps, recapitalize deals, or unlock liquidity.
Do I need to refinance my property to use preferred equity?
No. Most structures are designed to sit behind your existing loan without requiring a refinance.
How fast can preferred equity be placed?
Timelines vary, but deal-level preferred equity can often be structured quickly depending on the situation.
What types of properties qualify?
Multifamily, student housing, residential mixed use, self storage, and student housing.
Is this the same as mezzanine financing?
Similar position in the capital stack, but structured differently depending on the deal and desired flexibility.
When should I use preferred equity instead of debt?
When debt doesn’t stretch far enough, when you want to avoid refinancing, or when flexibility is needed during execution.
Have a similar deal?
Call Now To Discuss: 240-253-6003
or send details to Deals@verticalfunder.com