Amending my last comment...If your pref is based on IRR the sponsor won’t get their promote until investor’s cash in = cash out + the annual compounded pref rate

Take out your calculator...multiply 27K by 1.16 over and over (to represent  your 16% annual cash return compounded)...and see how many years it takes to "get wealthy" by whatever your definition is. 

Hello,I've read the BRRRR book (a great book) and checked its Compound Interest Calculator available at:http://greeneincome.com/tools/In the first unit given as an example there we have the following table details:Mortgage #1Initial Investment$125,000Mortgage %80%Mortage Value$100,000Note Income %12.00%Monthly Note Income$1,000Monthly ExpensesInsurance $40Taxes$55Mgmt. and HOA fees$100Mortgage Interest Rate4.5%Mortgage Expense$375Total Monthly Expenses$570Monthly Rent $ 1,000 Monthly Rental Profit$430Monthly Note Income$1,000Total Monthly Profit$1,430 I am having hard time understanding what does the "Monthly Note Income" means and where does it comes from. 

The buyers will find you if your deals were good.So I’m assuming that you were spending your money on finding the deals.Spending that sort of money you’re going to need a backend system put together to make sure nothing falls through the cracks.I would honestly suggest hunting with a bow and arrow instead of a shotgun.You will save money and have a higher response rate with more qualified deals

I have enough faith in the compound interest that mutual funds offer to commit to a 401k as a piece of my retirement plan.

Taking advantage of compounding interest on an already high priced asset.

Yes I think we will disagree (in my case) as the time remaining for compounding for me is realatively short and my rate of tax paid after I stop working will likely be significantly lower since what causes my rates to be high currently is limited to employment income, the rest of my income although considerable will nearly all be indefinitely deferred the way I invest and likely will remain so through retirement until death. 

Say you put that 10k in and made 7% per year for 5 years and compounded it each year that equate to a 7% IRR for those 5 years precluded that your 10k was returned to you at the end of the period.

When figuring out the 'seller finance' terms with your seller or buyer how does simple and compound interest figure into it? 

All projects are doing very well, however I agree with Matt - the market now is mature, there's a lot of supply (big and small), and that saturation compounded with current rates makes it tough to find even a two or three family property with up-side.