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.

LP, active vs. passive, preferred returns / promote, etc.) as I have to review operating agreements at times and I have reviewed promote waterfalls.

Pay a Guaranteed IRR of 10% and give them a small percentage of the back-end (do the waterfall structure as 90/10 for hurdle 1 and then 20/80 once you hit your guarantee-or-2.

There are other things to consider too; like fees to the developer, other fees enumerated in your operating agreement, matching (or "make-up" returns), waterfall structures, etc.

If the applicants are in one the HUD protected classes, I think this could invite discrimination accusations unless you have a clear, concise, and written waterfall system that demonstrates your increases are based on any/all applicants criteria.

The front door opened when we checked the unit and ( not kidding ) a waterfall of roaches came falling down.

I know in move waterfall model First Tier is always capital contributions.

Or some kind of waterfall structure.  

There is a zero depth water park, where the water falls from pails or fountains to play in. 

What I found helped a lot in understating waterfalls, was setting up the spreadsheets from scratch.