Option A:COC= $5,000/$100,000 = 5%ROI= ($5,000 + $15,000 accrued equity)/$100,000 =  20%Option B:COC= $5,000/$20,000 = 25%ROI= ($5,000 + $15,000 accrued equity)/$20,000= 100% Since the debt portion of $80,000 is being accounted for in-year through the OCF calculation, would we not be double counting it if we include it in the Investment Basis as well? 

Interest accrues each month but there’s no repayment schedule you need to adhere to.

FEES UPON TERMINATION: At the time this agreement ends, Owner must pay Broker:A. all amounts due Broker under this agreement; andB. if the Property is leased to a tenant on the date this agreement ends and Owner terminates thisagreement, an amount equal to the lesser of:(a) the management fees that would accrue over the remainder of the term of the lease; or(b) $ .As per 12 B aIf more than one property or unit is made part of and subject to this agreement, this paragraph appliesonly to those properties or units then leased and applies to each property or unit separately.How to interpret this sentence: "...the management fees that would accrue over the remainder of the term of the lease..." 

@Alina Trigub suggested that a pref is not always cumulative....does that mean for example if given an 8% pref, if the deal returns only 6% in year one, the 2% shortfall does not get accrued to be paid out in subsequent years before the sponsor gets their cut?...

Than identify to security deposit total (being sure to add any accrued interest) and subtract the costs from the deposit. 

Second, I called the tenant and tactfully, but sternly, explained the repercussions of the fees accrued and that any unpaid balances would be compounded.

There's no good way to explain fraud.Also, as you're not paying FICA you're not accruing Social Security benefits. 

the hard money loan is going to accrue interest for 3 months while it sits there not being able to get refinanced, and of course there is always the risk of the loan not going through.Help.....Need some advice from seasoned investors. 

Once purchased, that property will have continually-accruing expenses until it has sold again.

If suddenly there is a reduction of cash flow and now the distributions are no longer enough to satisfy the annual return hurdle, the unpaid portion starts to accrue.