While both important to investment metrics, preferred returns have separate implications for distributions than the projected cash on cash return to investors.Preferred Returns Preferred returns relate to the waterfall structure of how cash flows from the underlying asset are distributed between limited partners (LPs or investors) and the general partner (GP or the sponsor).

I was hoping to never have to do that.As of right now, the seller has calmed down a bit after I shared a few things off of this post.

Cash flow will come when rates calm but don't allow cash flow to be the sole factor in your analysis.

I appreciate your calming of my mind about the bugs.

They both have waterfalls, they are both newly formed entities, etc.  

You can set up the same waterfall and management fees as a long-term commercial residential deal.

Keep in mind you will likely want to refinance in the next 24 months as most expect rates to calm.

Also, usually when there's a pref there's usually waterfall structures on the back end.

I am getting bids to put a plunge pool/hot tub combo with waterfall in the ground next summer. 

On that call, we talk to them very gently, with a purpose, and calmly explained that we haven’t had the tenant in 6 month.