.: Quote from @Theo Hicks: In ideal conditions:Pref equity receives higher ongoing distributions but no profits at saleCommon equity receives lower distribution and profit at sale (assuming their is cash flow left over after pref equity is paid and assuming their is profit at sale.In non-ideal conditionsPref equity may receive ongoing distributions less than pref, or no ongoing distributions at all, but the pref accrues.

I have found a few deals on the market lately for some clients that flip, the numbers still gave the flipper a profit and the rehab time was 5 weeks.

I agree they had communication issues during a transition period that we dealt with, but things have improved from last year. 

I use the "profit first" approach to cash management and am VERY happy with what it has done for me. https://a.co/d/h16sPxR

However, if the property is a long-term hold, the lower interest rate with a prepayment penalty can often result in better overall returns.Another consideration investors should evaluate is how prepayment penalties are structured - whether it's a declining penalty over time or a flat fee - because this can significantly impact their profitability when selling earlier than expected.

Always formalize the agreement in writing to define costs, profits, and contingencies clearly.Let me know if you need help structuring the deal or exploring funding options.Best,Drago

Would I pay for all the remodel expenses and then 50/50 split of profits or does contractor pay remodel cost?

After transitioning all four residential tenants, we gutted each apartment and started fresh.

When you sell the property, and access the equity in the form of liquid cash, you make your profit. 

The unexpected always has a way of sneaking in at the last minute.Here's to a week of smooth transitions and no surprises!