By Darryl McCullough & Alejandro Duque
Senior Partner & Managing Partner
DUQUE REAL ESTATE EQUITY & ADVISORY
6 MIN READ
Equity is mobile. You can put it to work, change what it earns, and reshape the benefits it gives you, all without selling outright.
This paper is educational material drawn from real transactions. It is not an offer of securities, and it is not tax or legal advice for your situation.
Use My Equity
The paper we share before a first conversation: what the equity you already own could be doing, and how it goes to work without selling.
Most equity does nothing but sit. A free and clear building, the equity stacked above the debt on a financed asset, a note you hold, a partnership interest, idle cash. It holds value, but it is not earning its keep.
The good news: equity is mobile. You can put it to work, change what it earns, and reshape the benefits it gives you, all without selling outright.
The other half of the picture
Capable developers, investors, and operators (we call them Strategic Operators) constantly find quality deals but come up short on the capital or collateral to close them. A lender may be willing, but first wants more security behind the loan, more income covering the payments, or a stronger balance sheet standing beside the borrower. Their deal is good. They are simply missing a piece.
That gap is the opportunity, and your equity is the piece. When the two come together correctly, the Strategic Operator closes a deal they could not have closed alone, and you earn a return on equity that was sitting dormant. Both sides come out ahead. People do transactions, not properties, and our job is to structure the one that works for everyone.
What we do
We are the counselor in the middle. We find the right Strategic Operator and the right structure for your equity, design the deal so your position comes first, and put the pieces together. You stay as passive or as involved as you choose, you are not asked to take on risk you have not agreed to, and the structure is built safety-first around your goals. The order of payment we structure to is laid out in how we structure.
How you can participate
Your equity can go to work in whatever form fits the deal and your comfort: a joint venture, a loan or pledge of title, an asset exchange, or a mortgage created against your asset.
And what comes back can be shaped to your goals: shares in the Strategic Operator's project, a mix of cash and shares, income-producing paper such as a mortgage or preferred shares, an asset class that suits you better, or a custom structure built around what you actually want.
It works at any size
The formula is the same whether it is a single residential lot or a multinational's head office. Think across your whole portfolio: cash, mortgages and notes, vacant land, homes and condos, office, retail and commercial, multi-family, assisted living, mobile home communities, hotels and motels, mini-storage, campgrounds and RV parks, farms and ranches, building lots, recreational and resort property, and business interests.
How we protect you
Creativity does not replace due diligence. Every party should come away better off than before, and because structure carries tax consequences, we leave room for proper tax planning. Your position comes first: the return of your principal is placed ahead of our own upside, in every structure we propose. The asset classes we look to own with partners who bring equity are on the ownership page.
Proven in real deals
- A land parcel was pledged as collateral to secure a seller take-back second mortgage for a down payment, when the new lender would not allow a second. It let the buyers close, and the owner's land was released afterward.
- Buyers pledged raw development ground as credit enhancement to win a bank loan and cover some seller financing to buy a mid-sized company.
- A Strategic Operator briefly borrowed an owner's asset as added collateral to secure initial financing; once long-term funding closed, the collateral was returned untouched.
- Idle equity backed a lease/option; once rehab and new financing closed, the equity was released.
- A blanket mortgage covered the property being acquired, with off-site equity as extra security and partial releases tied to performance.
- A no-money-down buyer acquired a hospitality property with partial bank financing and a seller who took a safe off-site first mortgage.
- An owner with development land but no desire to build exchanged title into a jointly owned company with a Strategic Operator, structured to give the owner a safety-first position.
- A passive lender holding a foreclosed property took a larger, safe first mortgage on a separate approved property plus cash, turning a problem asset into secure income, while the Strategic Operator gained the land and cash to build.
Questions worth sitting with
Before any structure is drawn, the honest work is internal. A few of the questions we walk through with every owner:
- What type of investor are you at this point in the cycle?
- Why do you want to move this particular equity? What is the real motivation?
- What would you consider taking for it?
- Is there a mandatory cash component, for example debt repayment?
- Do you understand benefits beyond cash?
- What benefits exist for someone to take your equity?
- Are you mentally locked to a fixed price, or oriented toward increased benefits?
- What can you add to your equity to make a more attractive package?
- Are you open to a joint venture with all or part of your equity?
- Finally, are you a realist? Do you understand that the taker of your equity needs to see a future profit too?
The full self-assessment lives in two companion papers: We Are All Different and Preparing for Increased Transaction Benefits.
The road from here
If you have equity sitting idle, let us show you what it could do. No obligation, just a conversation about the options. We listen first, structure second, and put everything in writing before you commit to anything.