Real Estate Debt vs Equity Partners

[Benjamin Holt]

I recently started working for a development company and am essentially trying to learn a huge portion of the industry I am unfamiliar with. One of the biggest things I've had a little bit of trouble wrapping my brain around is the difference between debt lenders vs equity lenders. I understand that if you're working with a debt lender, it's essentially similar to borrowing from a bank.

Could someone explain to me in the SIMPLEST way possible, how the equity process works?

Let's say, just to keep math simple, that we are trying to raise $1 million dollars for a 50 unit multi-family complex and we're looking for equity partners to do so. How does this process work? How do they make their money? How do we make our money?

Any information would be greatly appreciated.

Thanks