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Buying Unlevered

J. Reindollar
Sep 22
1 min read

Downside for buying small properties unlevered: lower IRR

Sometimes, lower MOIC


Upside: Protect basis during macro downturns

Maximize whole $ profits ("you can't eat IRR")

Significantly less risk of "losing your equity"

Lowers transactional friction (lending process the same for $2m and $40m deals)

Time-horizon and business plan optionality

Most surprising benefit: can offer compelling seller financing at exit to enhance pricing



Current investment market conditions favor real estate debt vs. real estate equity



We like real estate equity, unlevered or low-leverage

 
 
 

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