MF Syndication LP buy out Proposal

[Mike Zhou]

The MF Deal is refinancing after some value added. They provided a buy out option to return the full initial capital back, however there will be no more interest in the deal. Is this a common practice, I thought typically deals returns portion of capital to the LP after refi, but LP still retains the same percentage share. Am I missing something ?

[Brian Burke]

Generally a refinance and return of capital wouldn't change the investor's ownership percentage, even if all capital was returned.  But you'd have to read the operating agreement to be sure.  Some sponsors slip in provisions that give them the ability to do differently.  

What you might be missing is the sponsor is seeking to add value to the property using your money, then reap the reward of that effort for themselves by getting you out, and not fully sharing that value with you.