FinanceIntermediateDelaware Exam

What is 'private placement' financing in Delaware commercial real estate?

AA mortgage from a private bank rather than a public institution
BRaising capital through the direct sale of securities to a limited number of accredited investors, bypassing public marketsCorrect
CPlacing a private lien on property as security
DPrivate negotiations between buyer and seller to determine mortgage terms

Why Raising capital through the direct sale of securities to a limited number of accredited investors, bypassing public markets Is Correct

Answer B: Raising capital through the direct sale of securities to a limited number of accredited investors, bypassing public markets

Private placement involves raising capital directly from accredited investors (institutional investors, high-net-worth individuals) without a public offering. It is commonly used in commercial real estate to fund acquisitions or development projects.

Exam Tip: Finance

Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.

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