All Forum Posts by: Dharm Mehta

Thanks to both of you for taking time to reply. Spencer to answer your question. Real estate agent is for residential. Basically finds a deal, and partnered with property management company. 

lenders are practically passive investors and some are in totally different field in entirety and may not even follow in detail. i.e MDs etc. 

In Nutshell, those other fees are not mentioned at all by GP - acquisition fee, finance fee, asset management fees, and sometimes disposition fees, but something I should clarify with them. 

Distribution: 70/30 (LP/GP) -- yes after capex/mortgage expense/debt services etc - free cash flow is distributed (70/30) 70(per your %) 30(divided between 2 GP). 

Spencer, you stated 6% preferred is on low side, what is industry standard for investors. (Do they ever have step wise increment in your preferred percentage based on amount invested). for ex 50K 6% ; 100K 8% etc. 

But interestingly, its a great deal to have syndication cause CAGR for GP is substantially high even though they don't collect preferred. One takes home in Property management ; and other takes home big chunk on sale of property (3%). 

CAGR for investor and Annual return is locked up around 8-9% for annual and around 14-15% CAGR (dependent on the years property is running and not sold). 

Hey guys, I have recently received an offer from Syndication of 12 units townhomes. Question is when deal is divided between limited partners($ investors) and General partners (realtor + mgmt company with not single $ invested) Deal 70% Limited partners and 30% for General partners- with 6% preferred on your share of invested dollars which general partners will not collect however, will divide NOI (70/30) with you getting your shared percentage investment (lets say 15%) of 70% on yearly basis; and later on sale of property (70/30) again.

My question, if any expert can please help; is if the General partners are not bringing any dollar to the down payment, is it reasonable for them to charge property management fees of 5% as long as they run the property and is it also ok for the other general partner to collect Realtor fees at the end when property sale occurs taking 3% of sale price. 

Need help to know if this is common practice of collection by General partners (as they are not bringing dollar to the table, but bringing their expertise; taking liability on the remaining of the loan and also finding a deal) ((( but collection through out holding the property by the personally owned management company and at the and sale price collected as realtor fees are steep !!!) 

Please shed some light on this syndication deal, any expert advise would be highly appreciated.