In recent years, many investors have watched stock charts swing up and down with every headline. Tech, AI, and growth names can move 5–10% in a day. Even traditional bonds now trade like risk assets when interest rate expectations shift.
At the same time, most savings accounts still pay a fraction of a percent in interest.
It is no surprise that more sophisticated investors are asking a simple question:
“Is there a way to earn contractual income that is backed by real assets instead of daily market sentiment?”
One of the most important — and misunderstood — tools that answers that question is private real estate debt.
At Fort + Home, we use private debt as one of several ways to finance real housing projects, including attainable housing communities. This article explains what private debt actually is, how it differs from bank loans and equity, where it sits in the capital stack, and why collateral matters.
This is an educational overview, not a recommendation or an offer of securities.
Most investors are familiar with owning real estate directly or buying equity in a project or company. Private real estate debt is different.
At its core:
Private real estate debt is when you are the lender.
You provide capital to a real estate project or operating company. In return, you receive:
You are not buying ownership in the property. You are entering into a contract:
Unlike a bank deposit or a publicly traded bond, these loans are typically negotiated privately between the lender and the borrower or through a professionally managed structure. But the economic idea is familiar:
It is similar to holding the mortgage instead of owning the house. Your role is to collect payments, not manage the property.
To understand where private debt fits, it helps to compare three familiar categories:
Bank loans are highly standardized and heavily regulated. They can be excellent tools, but they are often:
Private real estate debt is more tailored. Terms are structured around how a project actually works:
Equity is ownership. Equity investors:
Private debt sits between these worlds:
The trade-off is straightforward: private debt is typically designed for stable, contractual income with defined downside protection, while equity targets higher potential upside with higher risk and lower priority.
There is one aspect of lending that most people never think about: who keeps the spread.
In a traditional bank model, it looks like this:
Private real estate debt changes the picture:
The core ingredients are the same — capital, borrower, collateral, interest rate. The difference is who occupies the lender’s seat.
One of the defining features of private real estate debt is collateral.
Collateral is the specific asset that secures the loan — what the lender has a legal claim on if the borrower cannot repay.
In real estate lending, collateral commonly includes:
Collateral does not eliminate risk. Projects can still underperform and values can still change. But collateral changes the type of risk:
This is why sophisticated investors and lenders pay close attention to:
Those inputs drive how much real protection the collateral can provide if the unexpected occurs.
Every real estate project is financed with a capital stack — a simple way to show who has contributed capital and who gets paid, in what order.
A simplified stack looks like this:
Private real estate debt usually lives in the debt layers of this stack.
That means:
This priority is one of the main reasons investors dedicate a portion of their fixed-income allocation to private debt. You trade:
Private real estate debt is not an abstract concept. On the ground, it is often the capital that gets projects moving.
Common uses include:
For attainable housing, timing and flexibility are especially important. Traditional banks may be slower to underwrite or may tighten standards during periods of uncertainty. Experienced private lenders can:
That can mean the difference between a community that remains a drawing on paper and one that becomes keys in doors for real families.
For many investors, private real estate debt plays a specific role in the overall portfolio rather than replacing everything else.
Properly structured, it can offer:
The risks are real:
Projects can underperform, borrowers can default, values can change. That is why underwriting, structure, and manager selection matter.
But for many sophisticated investors, combining:
creates a more balanced risk–return profile than concentrating in a single strategy.
Whether private real estate debt fits your situation depends on your goals and constraints. Here are a few questions experienced investors ask:
None of these questions are “right” or “wrong.” They are simply a framework to help you think about fit, not a recommendation.
Fort + Home is a vertically integrated platform focused on building attainable, precision-built housing across the Rocky Mountain region. To finance real projects, we use a mix of:
Private debt is one of the tools in that mix. It helps:
Any specific investment opportunity tied to Fort + Home is offered only through formal offering documents and only to eligible investors under applicable laws. This article is not an offer and does not describe any particular offering, terms, or projected returns.
If you want to continue learning about private real estate debt and capital stacks, here are some next steps — all educational:
What Is Private Debt? — How Private Real Estate Lending Works for Investors.
Articles, videos, and frameworks on debt, equity, and how housing projects are financed.
If you’d like to walk through how private debt works at a deeper level, you can request an educational call with our team (no commitments, no live offer discussion).
This article and the linked video are for educational purposes only and are not:
Any actual investment opportunity would be offered only through formal documents and only to eligible investors in accordance with applicable securities laws. You should consult your own advisors before making any investment decisions.