All Forum Posts by: John Coffman

@John Coffman Why would you only be getting 2.4% of the ownership if you are putting down 12% (100/840=0.119) of the equity? You should be getting 12% ownership. 

So most investors offer a standard yield to limited partners. Typically it is between 7%-9% on the limited equity investment with an additional equity kicker to get an IRR of close to at least 12%-15% when the limited partner is bought out from a refinance or a sale of the property. Or it is structured where the limited partners obtains 49% of the equity once the property is sold. These are just some ideas that I have seen be done on deals by my clients.

James Storey, CCIM

Hey John,

It depends on if you are taking a GP (general partner) position in the investment or an LP (limited partner) position. The way you asked the question makes me think that you are structuring as a limited partner in which an annual cash flow yield (set by you and your partner) will be merited with lower upside on equity if much at all unless you negotiate upside. On the other hand, if you are taking a GP position (your name will be on the operating agreement), then it depends on how much the property cash flows will determine your individual yield. 

James Storey, CCIM

Hey John,

It depends on if you are taking a GP (general partner) position in the investment or an LP (limited partner) position. The way you asked the question makes me think that you are structuring as a limited partner in which an annual cash flow yield (set by you and your partner) will be merited with lower upside on equity if much at all unless you negotiate upside. On the other hand, if you are taking a GP position (your name will be on the operating agreement), then it depends on how much the property cash flows will determine your individual yield. 

James Storey, CCIM