Creative Financing for $60M Student Housing Deal – Making $6M Down Plausible?

[Daniel Sehy]

Hey BP community,

I’m underwriting a $60M student housing acquisition in a Tier-2 university market. The deal pencils with strong occupancy, 3-5% rent growth, and a solid management structure. Here’s the challenge:

• Lenders are targeting 1.5 DSCR.
• At today's terms (~7% interest, 20–25% down, 10% management), I'm landing closer to 1.25 DSCR.
• I’d like to keep equity in check, ideally around $6M down (≈10%) - while still making this bankable.

My question:
Has anyone here successfully structured a deal of this size using creative financing to bridge the DSCR gap without throwing in another $6–8M of equity?

Some strategies I’m exploring:

• Seller carry / second position notes
• Preferred equity / mezz debt layers
• Master leases to guarantee income floor
• Using entitlements or land value (25 acres attached) to sweeten the financing package
• Rent bumps modeled into refinance terms

I’ve seen other capital groups putting 5-10% down on $60M+ acquisitions and making the numbers work. Curious to hear from anyone who’s done something similar, what structures made it plausible with the banks/investors?

Appreciate any insights or examples. I’m looking to learn from those who’ve been creative at scale.