How to Evaluate & Manage Real Estate Investment Risk
Risk is the foundation of economic progress. If you avoid risk, you will inevitably miss economic opportunities. The key to taking risk with any investment is the ability to identify, control, and manage your risk, especially as it relates to anticipated returns. So how can you identify, control, and manage your risk with real estate investments when the market is constantly changing?
How Do We Align Interests in Our Real Estate Syndications?
In a real estate syndication, the general partner (GP) and the limited partners (LPs) each have different roles. The GP typically invests a small minority of the equity but takes on a more active role in acquiring and financing the property and making day-to-day management decisions, while the LP’s invests the vast bulk of the…
What is a Waterfall in a Real Estate Syndication and Why is it Important?
In a typical real estate syndication, a waterfall structure allocates the profits or losses from the investment to the limited partners (LPs) and the general partner (GP). This is done according to a predetermined formula, or “waterfall,” and this formula is documented in detail in the partnership’s Operating Agreement. The most obvious goal of a…
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