Questions for REI Fund Managers

[Omer Esiner]

New to the forum and a bit of a REI noobie. I have a few questions regarding setting up a small, private REI fund.

My partner (experienced SFR developer) and I plan on launching a small private fund focused on purchasing lots/teardowns and building SFRs in Austin TX.

My question for the pros on this forum is mainly related to the terms we offer to our investors. I was thinking, given that we're new to the REI space (but not to developing, and my partner does have a very impressive track record) we would offer our LP's a 20% proffered return on their investment and a 50/50 split between LPs and GPs on all returns above the 20% mark. Fund would charge a 2% management fee.

I've been told the preferred return is a little high but given that we're a new fund, it's reasonable return for our investors.

Would love to hear some thoughts on the terms that we're thinking.

Thanks in advance!

OE