Syndication deal structure - seeking opinions

[David Cas]

Hi -

I'm an investor & new partner working on a $1M+ deal with a syndicator / sponsor. Here's how the deal is being put together:

- Property ownership: Syndicator ~80%, rest split among investors depending on amount invested. ($100k investment would get 10% ownership on a $1M deal)

- Cashflows: Investors receive up to 12% annual return on their investment paid monthly. Investors get paid if NOI is positive for the month. Syndicator has preferred return for first $500, any free cashflow beyond 12% goes to syndicator. Expenses split according to ownership stake (in this deal, syndicator has responsibility for paying 80% of expenses)

- Additional details: Mortgage under syndicator. Syndicator put the deal together end-to-end (finds deal, negotiates, closes, sets up LLC, works with lawyers/banks/accountants/management companies, etc)

I have a good relationship with the sponsor and am simply looking for an opinion as this doesn't seem to fit your traditional syndicated deal structure.

Thanks!!