Waterfall Structures in Syndicate Investments

[Adam Lendi]

Looking for advice from experienced syndicators on what works best to attract investors. My partner and I are investing in RV parks and bringing investors into our next deal.

We are analyzing the parks now using an 8.5% pref and a 65/35 waterfall. We want to give our investors great returns and while I feel this is a generous structure, I'm curious to hear from those with experience. Is this too generous? Is there something that works better? Are two tiered models too confusing?

Thanks in advance!

[Charles Carillo]

@Adam Lendi

It really depends on the specific deal and how much work is required in the business plan. Typically, you will see a 7% or 8% pref and a 70/30 split. What returns have you floated to your investors? What was their reaction?