Seed capital compared to Mezzanine funding in real estate

10 Replies

@Tyler Horton Mezz debt is typically a second position on an asset to raise the leverage on the deal and raise returns to equity.  Interest rates are very high because a second portion is essentially worthless if you default on the first position debt.  In a foreclosure in the first position debt, the mezzanine debt will be wiped out.

What do you mean by "seed capital"?  Are you talking about the equity downpayment on the asset?

Well, I am pretty sure that Mezzanine funding is for building a mezzanine in between two floors. Seed capital is a totally different story, that is the money you use to buy seed for your lawn. 

Jokes aside, I am fairly certain that a quick google search will confirm Jonathan Twombly's assessment of mezzanine debt as accurate.

Originally posted by @Tyler Horton :

What is Mezzanine Funding in REI? How does it compare to Seed Capital?

 Tyler, I think mezz is covered fairly well in this forum at this point - but when you say seed capital ? What specifically is the application ?

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