Fair Equity/Profit Splitting in Syndications

[Jacob Cytrynbaum]

Hello! Hoping to get a little clarity on this issue. Obviously have not done this before and want to be really clear on deal structure before I start so I don't unintentionally screw investors or myself. 

Suppose I syndicate a deal with the following terms: The GPS gets 20% equity+capital they contribute. Investors get 8% annual preferred CoC, then 70/30 profit split up to 12% CoC to investors, then 50/50 thereafter. I expect the building to be cashflow positive each year (not a new development or big value-add project that would take a year or two to cashflow and returns only show up when the building sells).

1. What happens when I sell the building--do I count the money investors have already been paid when considering how to split profits on the sale? Obviously I ensure they get their capital back first and foremost. 

2. What is the point of taking that 20% equity if I have already predefined the profit-split? Is the point that I am double dipping, i.e. that the GP participates as an LP with 20% equity then also gets the bonus waterfall splits? Or do I have that wrong?

Really appreciate any input you all have