Debt Fund Secrets Revealed w/ Dave Kotter of Integrity Capital - S. 4 Ep. 1
Mon Jan 12 2026
Summary
In this conversation, Chihiro and guest David Kotter delveinto the concept of hybrid debt funds, exploring their structure, benefits, and the unique opportunities they present for accredited investors. David explains how these funds blend traditional debt with equity upside participation, offering developers a simplified capital stack while retaining depreciation benefits. The discussion covers the criteria for borrower selection, the investment structure of the fund, and the associated risks in commercial real estate. David emphasizes the importance of timing and discipline in lending decisions, as well as the focus on specific asset classes. The conversation concludes with insights on future growth and the potential for investors to achieve attractivereturns.
Sound bites
"We take 30 to 35% of the upside economics."
"We project 11 to 13% net IRR for investors."
"Discipline in lending decisions is essential."
Takeaways
Hybrid debt funds offer a blend of debt and equityparticipation.
Developers benefit from simplified capital stacks andretained depreciation.
Borrowers must have a proven track record and financialstability.
Closed-end funds provide stability and predictability forinvestors.
Investors can expect 11-13% net IRR with downsideprotection.
The fund focuses on multifamily, industrial, and strategicretail assets.
Timing and market cycles are critical in commercial realestate investing.
Discipline in lending decisions is essential to avoid marketpitfalls.
Investors should understand the risks associated withcommercial real estate.
The fund aims for growth and future fund offerings.
Chapters
00:00 Introduction to Hybrid Debt Funds
03:05 Understanding the Hybrid Debt Fund Model
06:09 Benefits for Developers and Borrowers
08:57 Criteria for Borrower Selection
11:59 Investment Structure and Fund Details
14:50 Navigating Risks in Commercial Real Estate
18:01 Asset Classes and Market Focus
21:00 Fund Operations and Investor Returns
24:00 Future Plans and Fund Growth
26:54 Philosophical Insights on Market Cycles
Keywords
Hybrid Debt Fund, Commercial Real Estate, InvestmentStrategies, Accredited Investors, Real Estate Financing, Debt Funds, Investment Opportunities, Risk Management, Fund Structure, Market Cycles
More
Summary In this conversation, Chihiro and guest David Kotter delveinto the concept of hybrid debt funds, exploring their structure, benefits, and the unique opportunities they present for accredited investors. David explains how these funds blend traditional debt with equity upside participation, offering developers a simplified capital stack while retaining depreciation benefits. The discussion covers the criteria for borrower selection, the investment structure of the fund, and the associated risks in commercial real estate. David emphasizes the importance of timing and discipline in lending decisions, as well as the focus on specific asset classes. The conversation concludes with insights on future growth and the potential for investors to achieve attractivereturns. Sound bites "We take 30 to 35% of the upside economics." "We project 11 to 13% net IRR for investors." "Discipline in lending decisions is essential." Takeaways Hybrid debt funds offer a blend of debt and equityparticipation. Developers benefit from simplified capital stacks andretained depreciation. Borrowers must have a proven track record and financialstability. Closed-end funds provide stability and predictability forinvestors. Investors can expect 11-13% net IRR with downsideprotection. The fund focuses on multifamily, industrial, and strategicretail assets. Timing and market cycles are critical in commercial realestate investing. Discipline in lending decisions is essential to avoid marketpitfalls. Investors should understand the risks associated withcommercial real estate. The fund aims for growth and future fund offerings. Chapters 00:00 Introduction to Hybrid Debt Funds 03:05 Understanding the Hybrid Debt Fund Model 06:09 Benefits for Developers and Borrowers 08:57 Criteria for Borrower Selection 11:59 Investment Structure and Fund Details 14:50 Navigating Risks in Commercial Real Estate 18:01 Asset Classes and Market Focus 21:00 Fund Operations and Investor Returns 24:00 Future Plans and Fund Growth 26:54 Philosophical Insights on Market Cycles Keywords Hybrid Debt Fund, Commercial Real Estate, InvestmentStrategies, Accredited Investors, Real Estate Financing, Debt Funds, Investment Opportunities, Risk Management, Fund Structure, Market Cycles