In real estate investing, a term you’ll hear a lot is “capital stack”, and it refers to where you are in line for claims on a property (and/or the cash flow and profits from that property).
When you’re lower on the capital stack (for example, with a debt investment secured by a lien on the property), the risk is lower, but you also won’t get to share in as much upside if the investment does well. If you have an equity investment, you’re taking more risk, but you also get a higher potential reward.
There’s no “right” place to be, it all depends on your situation and goals, but investors often favor a particular kind of investment based on where it puts them on the capital stack. What’s your preference, and why?