The syndication structures/waterfalls I have drafted are a comparatively high cost of capital/equity dividend rate when compared to hard money and certainly institutional financing.

That doesn’t change much from a practical perspective until the percentage is exceeded—it just delays going to the next tier until capital is returned, that’s all.Another clue is that if preferred return is based on an annualized return, the waterfall language would have to say something like, “first, to the Class B Member to the extent of their unreturned capital,” if the first distributions were to be return OF capital.  

My dream property is a property I own in Costa Rica, which is a 2 bed/1 bath on 13,000 square feet of land within 60 seconds walk to a surfing beach, in a small beach town of 500 people, located 25 minutes drive from a larger beach down.I plan on building a surf shed to house surf boards, a large swimming pool, a bbq area, fruit trees throughout the property, install a streem with a small waterfall and fish, then tear down the existing house a couple years down the road and put in a 5 bed/6 bath house, use it for myself every 90 days, going there with family and friends, the rest of the time rent it out short term rental.   

If you can find an investor who only wants X% and you make 2X% and get to keep the rest, let me know so I can partner with them :) Usually for projects I'm involved in, there's a waterfall in the proforma with promotes.

@Calvin Lang My planned approach, at least presently, is to accrue a number of properties (I am shooting for 10-15 multifamily homes) with leverage and than use waterfall payments to pay of the existing mortgages.

Very quaint and charming with rivers, serrated plateaus in plain view and waterfalls nearby.

Waterfall Structure3.

The rent during the intervening years and the proceeds of the sales will then be distributed to the LPs and GP (myself) based on agreed waterfall percentages establish in the operating agreement of the LLC for this fund.  

Furthermore, risk is added to common equity investors who are now even farther down the distribution waterfall.

Your budgets very tight as well as a waterfall analysis for equity distributions. 3.