b'Most private equity funds would rather offer mezzanine debt (i.e., a second position loan) than joint venture. Lenders, however, wont allow subordinate debt, but they will allow joint ventures as long as each joint venture member puts forth their own loan guarantors.Private equity investors typically want returns of up to 15% annually, which they will insist on taking before your syndicate or fund gets its cut. The private equity fund partner will often demand that their annual returns be paid, and that they be paid back their principal within 3 to 5 years. Additionally, they will make the syndicate pay for their pre-acquisition legal fees, which can range from $60k-$80k. Also, look for a breakup fee, which the private equity fund may impose if the deal goes south after they have performed due diligence. You will owe this even if you dont do the deal at all. The relationship begins with a term sheet provided by the private equity fundinwhichtheexpectedreturns,theirfees,buy-outclausesand deliverablesaredescribed.Thetimetogetcorporatesecuritiescounsel involved is when you receive the term sheetbut before you accept it. We may be able to help you negotiate better terms.Once the syndicate accepts the term sheet, the private equity funds legal counsel will draft the joint venture operating agreement, which may be long and complicated. You will need your own corporate securities counsel to help you understand your obligations under this agreement.Entering into a joint venture with a private equity fund or family office adds additional risk to your investors, as failure to meet their conditions couldresultinforfeitureoftheproperty,andacompletelossofyour 169'