Capital Stack Optimizer
Get a recommended senior debt / mezz / equity / sponsor co-invest structure for your coliving project, complete with cost-of-capital math, comparable deals, an investors-to-approach list, and a term sheet template.
How It Works
Describe Your Project
Project size, market, type (new build / conversion / acquisition), operator stage, target IRR, and risk tolerance.
See the Recommended Stack
Visual stacked bar showing senior debt, mezz, LP equity, and sponsor co-invest with cost rates and dollar amounts.
Download the Investor Memo
Term sheet template, 5 comparable deals, 5 investor categories with example firms, and 7 common structuring mistakes.
Project Inputs
Total capitalization needed: $5.0M
Enter your project inputs and click "Optimize My Capital Stack" to see a recommended structure with cost-of-capital math and comparable deals.
Discuss Your Results with 800+ Coliving Operators
Join our free WhatsApp community to compare numbers, share strategies, and get answers from operators worldwide. No spam, no pitch — just real conversations.
Why first-time coliving sponsors lose deals to bad capital structures
First-time coliving operators routinely walk into LP meetings with one of two problems. Either they have no opinion on the capital stack — they want 'whatever the market will do' — and lose credibility in the first 10 minutes. Or they pitch a stack that's structurally wrong for their stage: too much senior leverage as a first-time sponsor, no mezz layer when their cap rate spread justifies it, or zero sponsor co-invest because nobody told them LPs require skin in the game.
The result is the same: term sheets that don't close, or close on terrible terms. We've watched founders sign mezz at 15% when they could have raised it at 11%, or give up 60% of project IRR on equity when 40% would have been market. These mistakes are rarely a math problem; they're a vocabulary problem. Founders don't know what good looks like, so they negotiate from a weak position.
The Capital Stack Optimizer fixes the vocabulary problem. It tells you what a market-rate stack looks like for your project type (new build / conversion / acquisition), your operator stage (first-time / scaling / established), and your market. It calculates your weighted average cost of capital, shows you comparable deals that recently closed, and gives you the investor categories most likely to fund each layer. You walk into your next LP meeting with the same vocabulary the LP is using.
Built for everyone raising coliving capital
You've never raised institutional capital. Use the optimiser to learn the vocabulary, see what a market-rate stack looks like, and avoid the structural mistakes that kill first-time sponsor deals.
Your old fundraise structure (friends-and-family equity) doesn't scale. The optimiser shows you when to introduce senior debt, when to add a mezz layer, and how much sponsor co-invest LPs will expect at your stage.
You know BTR / multifamily structures cold. The optimiser translates your existing capital playbook to the coliving-specific risk profile (lease-up risk, opex, regulation).
An operator pitched you a stack and you want to sanity-check it. Run the deal through the optimiser to see whether their proposed structure is market-rate or aggressive.
Conversions sit in the middle on lease-up risk. The optimiser balances higher senior debt for stabilised acquisitions vs lower for new-builds — calibrated to conversion-specific deal patterns.
Different markets accept different structures (UK senior debt is cheaper than India; US LPs expect higher sponsor co-invest than European LPs). The optimiser surfaces these structural differences before you pitch.
What you'll get
A recommended stack, the math behind it, and a path to investors who fund deals like yours.
- Visual capital stack: senior debt / mezz / LP equity / sponsor co-invest with $ amounts and %
- Cost of capital per layer with rationale and current market spreads
- Weighted Average Cost of Capital (WACC) — the threshold your project NOI must beat
- 5 comparable coliving deals that recently closed at similar structures
- 5 investor categories with example firms most likely to fund each layer
- Term sheet template for senior debt, mezz, and LP equity
- 7 common structuring mistakes operators make at your stage
Take the PDF directly into your next LP / debt fund meeting.
The capital reality coliving operators face
typical senior LTV for coliving acquisitions in mature markets
Comparable deals, 2024
sponsor co-invest most institutional LPs require
EC LP survey
blended WACC range for well-structured coliving deals
EC deal book
spread between best-in-class and weakest sponsors on equivalent debt
EC operator interviews
The 7 capital-stack mistakes that kill coliving fundraises
Skipping sponsor co-invest
First-time sponsors think LPs will fund 100% of the equity. Almost no institutional LP will. Plan 5-10% co-invest from day one or watch term sheets evaporate.
Maxing senior debt as a first-time sponsor
Banks lend less to operators with no track record. Start at 50-60% LTV with debt funds and family offices, build a 2-3 deal track record, then graduate to commercial banks at 65-70%.
Confusing rate with all-in cost
A 5% senior loan with 3 points and a 1% exit fee is more expensive than a 6% loan with no fees. Always negotiate on all-in cost, not headline rate.
No mezz layer when the spread justifies it
If your stabilised cap rate is 7% and senior debt costs 6%, there's room for a mezz layer at 11-13% that boosts levered returns. Operators who ignore mezz leave LP IRR on the table.
Pitching equity before debt is committed
LPs ask 'is the senior committed?' as the first question. Get a debt term sheet (or LOI) before raising equity — it changes the entire dynamic of the equity conversation.
Overpromising IRR to win the LP
An over-promised IRR you miss in year 2 destroys the relationship and your ability to raise the next fund. Promise the IRR you'd be happy delivering at -10% occupancy.
No exit assumption in the model
If your IRR depends on exit at year 5, you need a defensible exit cap rate and buyer thesis. 'Sell to an institutional buyer at year 5' is not a thesis without comparable transactions to back it.
Tools that pair with the Capital Stack Optimizer
Use these to build the rest of your investor package.
Coliving vs BTR Yield
Prove the yield case to LPs who default to BTR comparisons.
Try it free →Investor Pitch Generator
Generate a coliving-specific pitch deck outline with financial projections.
Try it free →Cash Flow Projector
Build a 12-month cash flow that LPs can stress-test in their model.
Try it free →Break-Even Calculator
Defensible break-even occupancy your LPs will pressure-test.
Try it free →Frequently Asked Questions
What is a capital stack?
Why does the optimal stack vary by project type?
What is sponsor co-invest and why do I need it?
How is the weighted average cost of capital (WACC) calculated?
Where do the comparable deals come from?
Which investor type should I approach first?
What if my projected IRR doesn't beat my target?
Can this tool replace a CFO or financial advisor?
Need Investor Network Introductions?
Our team helps coliving developers structure capital, refine the pitch, and access our network of debt funds, family offices, and institutional LPs.