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You can roll it, you’d want it up front, but your dev fee can be baked into your S&U, and you can also have a deferred developer fee that gets paid out in cash flow
I'm the broker. So no Dev fee. I want to roll my debt fee in as equity.
I am not a broker but it seems highly unlikely. That is ordinary income
Yes, this is done every day. Hell I do this in every capital raise/debt raise I do.
And do you roll the full value or pay taxes first?
This depends on how the fee agreement is structured. It can be done either way.
To clarify:
I am asking the sponsor if I can invest my fee owed for procuring the debt into their deal as equity.
So investing the $1mm fee as an LP in their deal instead of getting it paid at close and paying taxes on it.
You can, but generally need to be a memeber of the GP group. If you invest as a pure LP you will need to proportion at least part of the taxes. How I do this is to become part of the GP and take an active role in the group as an investor relations member. Do note, that I structure debt and equity for deals so it is different than pure debt structuring.
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