Equity
Equity is the difference between value and debt.
Notice we did not say anything about cost, which has very little to do with the equity one holds in a transaction (stock, company, real estate, etc). The value of the underlying asset is the key to equity.
An equity investment generally refers to the buying and holding of shares of stock on a stock market by individuals and funds in anticipation of income from dividends and capital gain as the value of the stock rises.
It also sometimes refers to the acquisition of equity (ownership) participation in a private (unlisted) company or a startup (a company being created or newly created).
When the investment is in infant companies, it is referred to as venture capital investing and is generally understood to be higher risk than investment in listed going-concern situations.
When the investment is in real estate it is sometimes referred to as a "unit" of ownership, or an "interest" in the property.
Real estate equity investing is different, i.e., unique, from other forms of investing in that the underlying asset, the real estate, has value outside of the implied value assigned to it by the purchasers of equity in the asset.
Stocks, for instance are worth what buyers and sellers of the stock agree it is worth.
Real estate, on the other hand, is worth the use to which it may be put. And, that value (that use) may be increased by developing the real estate for a higher and better use than the use it originally supported.
Yes, a buyer and a seller have to agree on a price, if a property is to be sold, but the value of the real estate can be intrinsic to the property regardless of what factors influence the sale price of the property.
The most important thing about real estate equity is that the value of the underlying asset has a 99.9% probability that it will never go to zero in value. Real estate equity is the best known vehicle for holding its value in a volatile market and preserving the wealth of those that own it. No other investment platform of which we are aware can make that claim.
Spectrum Lenders, LLC, works to secure equity for ventures on an on-going basis.
Be it buyers using their own money to acquire property (personal equity), institutions investing in income generated by commercial property (institutional equity), or iterations of variations in between, Spectrum has access to creditable sources of equity for most types of projects.
Additionally, Spectrum Lenders is expert in producing private placement documentation which allows its clients to source equity from hundreds, if not thousands of individuals and entities, much like would be the case in a public offering.
The Reg D, private placement, is not for everyone, but for those that wish to raise large amounts of equity, it is the preferred, most cost effective way to do so.
