Net Income and Distributions Calculation

[Jordan Burnett]

Pardon my ignorance, but in reviewing some income statements for investments I'm trying to make sense of some napkin math concerning Net Income and Distributions. 

For distributions to occur for a multifamily property, do those distributions have to come out of Net Income after mortgage/debt expense? I assume this has to be true, but wanted to verify whether or not this thought process makes sense when reviewing an Income Statement or if it's more complicated due to behind the scenes stuff or accrual accounting vs cash accounting. 

When an operator is looking at whether or not to make distributions, wouldn't the Monthly Net Income have to be equal to ([Investor Equity x Distribution Percentage] / 12) ? 

I.e. if Investor Equity = $1,000,000.00 and the preferred return or cash on cash distribution is equal to 7%, wouldn't the property's net income need to be equal to $5833.33/month to justify a distribution? 

Thanks in advance!