But that also means the waterfall structure limits upside for the investor too.

So you get paid 5-6-7-10% first, before waterfall....and not always in the current year, but until your % is caught up. 

Google "equity waterfall" or browse www.adventuresincre.com if you'd like to learn more about how the math works.

That equity waterfalls to the next deal, keeping your net worth growing. 

Not to be outdone...here is another model:GP/LP Waterfall ExampleI sent this to Phil this evening too.

@Ben LeybovichIf I was in your deal and there was a 2X on the property value at sale before splits , that would probably give me a healthy multiple (based on the waterfall details) and I could easily re-invest the larger sum into any dozen trusted GPS to regain different losses again that same year.

The waterfall of cash flows with the promote needs properly documented in the operating agreement and legally structured.

Partnership structures can be very complex, such as waterfall calculations, specific allocations, basis adjustments, etc.2.

--So beautiful, waterfalls, tourist areas, and psudo Wisconsin. 

It lacks the waterfalls of NE GA.