If the cash split, or waterfall, is 70/30 then the LP investors would get their pro rata share of $700,000 and the sponsor will receive $300,000.Sponsors also make money from fees and often by rolling those fees into the deal as LP equity that greats treated the same as other LPs. 

In other words, the investor portion is always split pro-rata and that includes your capital.On to your questions:1.

I’m assuming it’s a modified NNN in which the landlord is responsible for roof, structure and parking repair and replacement, with the tenants paying a pro-rata CAM reimbursement every month?  

I’ve been reading diligently on the issue, and wanted to be certain I understand how to structure so that the LLC does not “sell securities” and hence does not need to meet one of the SEC Reg D exemptions.Do I understand correctly that if instead of investors, capital comes from non-voting equity members in the LLC, sharing in the profits & risks pro rata to their capital contribution, then the LLC is not “selling a security”?

@Jeff Rabinowitz I'm assuming that's the pro rata share for constructing the main sewer line to , and down the street, without actual hook up charges. 

Our agreement wording is:After additional deductions for cleaning and repairs necessary to restore the premises to its original condition (less allowance for reasonable wear and tear), along with deductions for any rent due (including rent loss during periods of restoration), late fee, caused inspection/eviction, utility, notice, legal and any breach of contract costs, the balance of the security fee shall be refunded pro rata as follows: 10% of the remaining balance for up to one month of occupancy; 20% for two months, 30% for 3 months, 40% for 4 months, 50% for 5 months, …and so forth until 100% for 10 months or more of occupancy.We also look for applicants who have demonstrated by past behavior that they are capable at staying at an address for some length of time; one year minimum, more is better.  

, with the pro rata portion of the capital gain attributable to the investment period, as opposed to the primary residence period, being taxed at the capital gains rate. 

The wording seems to be capital is returned pro-rata. so when things go bad, both class A and B investors would lose capital proportionally. so class A is not as protected as you might think.so in that case, why would you want to invest in class A?

They do not want landlord overcharging CAM estimate all year and keeping that money interest free to then give back as credit to tenant.Another one leases generally have language that tenant only pays pro-rata cam portion for the space they occupy.

Technically, this is not a NNN lease, but a pro rata share of the expenses; electric, water, taxes, snow, main.