At Property Refi Investor Cashout, Do They Retain Equity or Not?

[Bob Mason]

This assumes that you have syndicated a deal on a value-add multi-family deal with one or more investors for an initial hold term of 4 or 5 years to cashout or refinancing. This also assumes that you've gotten enough appreciation of the property that there's 30% more equity from initial purchase.

Do you set up the initial documents at purchase and investor syndication for the investors to get back their principal and additional returns, and then they are out of the deal? Or do you get them back most of their principal and your investors stays in the deal after the refinancing of the property?

Is this all set up in your LLC documents at the beginning?

Thanks in advance for your thoughts!