It is a lovely area near Lake Superior with nice hiking, waterfalls, snowmobile trails, etc.

Such situations are getting your opinion on a recently passed tax law, representing you in front of a tax court or analyzing complex tax situations(Transfer pricing, drafting complex partnership agreements with carry/waterfall calculations, etc)You likely want to connect with a CPA and a 1031 intermediary to help you with you needs.Best of luck!

You have to make sure to have a promote/waterfall in there or else people will judge you for not being sophisticated.

Negotiable terms will be in operating agreement, and would prioritize investor capital being paid back first, waterfall structure 93-7% than once he has all his capital back you get to split however you guys decide.

In most cases, the passive investor will receive additional payments from a waterfall structure.

Are you offering a pref, a GP catchup, a multitiered waterfall?

August is the slowest month because 8/1 is BTS in Georgia.That said, there is no dry period as people like the winter mountain coziness, yet it’s still warm enough to go on a waterfall hike.  

The preferred return is ONLY a defined rate of return in the subscription docs which the investor must achieve before moving to another tier in the waterfall.

The investor gets all of it to the point that it equals 8% on any unreturned capital and the rest drops to the next tier of the waterfall, which usually means that that surplus portion gets split with the managing partner in some way.To answer your question, preferred returns can be whatever number the investors and manager agree to, but the most common range is 8% to 10%, with 8% being most common in my experience.It is possible (and common) to have a 10% preferred return on a three year investment and a 0% cash-on-cash return for the entire hold period.

This is unlike most other forms of real estate private equity such as LLCs, LPs, Private REITs, etc. where a large portion of the potential appreciation is given to the sponsor typically thru a waterfall splitWhen a DST 1031 property is sold, the investors are free to do another 1031 exchange into any type of “like-kind” replacement property.