Waterfalls are also common after a targeted return to investors hits say 18%, then the split may change to say 50/50 for every $1 distributed above that 18% IRR. 

I am wondering what advice you can give on an appropriate waterfall payout to investors if I am the manager of the real estate assets, leases, and management.

And it can go to even a more even split based on waterfalls and other more complicated structures.3.

Can anyone recommend a deal analyzer with a more robust underwriting of the waterfall/promote?

There is enough depth in at least one section to more than cover a submersible pump, which can be used to feed a waterfall, or can simply bubble, to keep water movement.

They don't care about kittens, ponies or waterfalls. 

I just met with a local investor out here in Orlando, FL and he structured a few of his early deals (he now strictly works with commercial retail) with an investor with something called a 'waterfall' payment?

A and B are pari passu, C is next in the waterfall, and D is last.For a single-purpose syndication you can probably have a mini max where the funds are held in escrow or an attorney trust account.

The waterfall structures, capital transaction fees, etc only nickel and dime L.P.’s.

Again, other might feel differently here.b) Skin in the game: as a conservative investor, I understand that the dirty secret of industries that the waterfall compensation is in the line with me and incentivizes sponsors to take more risk.