Justin Davis

In this structure, you are not acting as a lender. There is no promissory note, no guaranteed repayment obligation, and no loan being created. Instead, you are receiving preferred equity ownership in the entity that acquires the property. Liens protect loans. Equity is protected through ownership rights, governance provisions, and priority economics — not foreclosure.

Title transfer allows the property to operate normally, be insured properly, and qualify for institutional or DSCR financing. That said, control is not based on title alone. Your protections are built into the operating agreement and include consent rights, restricted actions, and default provisions that govern how the property can be operated, financed, or sold.

In some cases, the initial period allows time for stabilization, operational transition, and financing alignment. Making payments before the property is fully stabilized increases risk rather than reducing it. Your equity position is designed to benefit from value creation rather than early cash extraction. This is not deferred debt.

This structure does not rely on litigation or court enforcement. Instead, default events trigger automatic governance changes, including shifts in control and economic priority as outlined in the operating agreement. These protections are contractual and do not require foreclosure proceedings.

No. All stages of the transaction are defined upfront, including timelines, conditions, and consequences. Nothing in the structure relies on informal promises or future renegotiation. What happens later is determined by what is agreed to now.

The buyer is responsible for day-to-day operations. However, capital decisions — such as additional debt, refinancing, or sale — are subject to defined restrictions and approval rights. Operational control does not mean unrestricted authority.

Earnest money is only one measure of commitment. This structure also requires lender underwriting, entity formation, third-party costs, operational onboarding, and reputational risk. Our commitment is demonstrated through execution, not just a deposit.

Tax treatment varies by individual circumstances. We do not provide tax advice or make assumptions about your personal tax situation. Your CPA should determine how this structure impacts you. Our role is to provide flexibility and options, not guarantees.

Traditional seller financing creates debt. This structure removes seller debt entirely and replaces it with equity participation. Equity and debt are protected differently, and this structure is designed to align incentives rather than create repayment pressure.

Commercial real estate transactions often include preferred equity, capital waterfalls, governance provisions, and layered protections. The goal is not complexity for its own sake, but precision — so everyone understands their rights, protections, and outcomes in advance.

The Equity Carry Method does not remove protection — it changes the type of protection. Instead of being a lender waiting to be repaid, you become an equity partner with defined rights, protections, and participation in the upside of the asset.