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Updated almost 8 years ago on . Most recent reply

User Stats

41
Posts
8
Votes
Steve Lyman
  • Rental Property Investor
  • Milford, MI
8
Votes |
41
Posts

Pref Equity Question

Steve Lyman
  • Rental Property Investor
  • Milford, MI
Posted
Hello, Recently went under contract wth another property. I have a question regarding investors, since this is my first deal raising capital. I am raising $500k, selling $50k units giving an 8% pref annually and 9% equity (taking 1% as my acquisition costs). My question is in regards to the pref. Am I paying the 8% pref on what they initially invested ($50k) or is it 8% of net income, then after paying the investor's prefs splitting the remainder for equity? Thanks, Steve

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