This is called a "waterfall" and it rewards the person doing the work if they do a great job and produce a great return.Extra credit (postgraduate class):  There are variations on how pref is treated.

I have seen nails blown straight into/through plumbing lines, toilets that just about fell through the floor from caulked in water-fall-leaks, and all kinds of stupidity that made that "cheap guy" way WAY-expensive because of all the repairs needed to their "cheap" work. 

I own it now, loving my waterfall!

On the sale, though, if you were using an amortized loan then you will have recovered equity throughout your hold which should be included into your waterfall.

He also gets into advanced topics such as different waterfall structures / catchups / clawbacks.Some others:Rob Beardsley (https://lonestarcapgroup.ac-page.com/model-giveaway)David Toupin (https://www.obsidiancapitalco.com/dealanalyzer)Additional training programs:Adventures in CRE (https://www.adventuresincre.com/)https://www.getrefm.com/There’s a bunch more out there.

I have considered an equity waterfall but don’t have any intention of selling. 

From what I can gather an equity waterfall applies after the property is sold?