The Truth About The Need to Align Professional Interests: Want Flush Advice to Fulfill Real Estate Syndications?

Investor Alignment Starts With Shared Incentives

In every real estate syndication, the general partner (GP) and the limited partners (LPs) play different but interconnected roles. The GP typically contributes a smaller share of the equity but takes responsibility for acquisition, financing and day-to-day operations. Meanwhile, the LPs contribute the majority of the capital and take a more passive role.

Because LPs entrust their capital while relinquishing control over execution, alignment of interests becomes paramount. When those interests are not closely aligned, outcomes can suffer—misunderstandings emerge, incentives clash, and returns deteriorate.

Our Philosophy: Investors Come First

At PRPI, we take an investor-first approach to structuring and managing real estate partnerships. We always invest alongside our LPs and never take cash fees at closing. Our focus begins with developing a high-conviction thesis on a specific market or asset. Once that conviction is in place, committing our own capital alongside our LPs becomes an easy decision.

In most cases, we invest 5–10% of the total equity—and often more. Additionally, we act as Key Principal, providing personal guarantees required by mortgage lenders. These are deliberate choices that put us on the same side of the table as our partners. They’re not just symbolic—they are central to how we structure alignment from day one.

We Are Not a Fee-Driven Sponsor

Our fee structure is limited. We do not extract cash fees at closing, nor do we charge refinancing or disposition fees.

This matters. It signals to our investors that our returns come from the quality of our investments—not from stacking unnecessary or excessive fees into the deal structure. Since 2006, we’ve built our business by delivering performance—not by optimizing for transactions.

Waterfall Structures Should Protect LPs

Waterfalls are a foundational part of syndication structures. They govern how profits are distributed and define when the GP is entitled to participate.

We approach waterfalls with the same care and transparency as any other deal term. Our structures always:

  • Prioritize a Preferred Return to LPs (typically 8%) before any GP profit participation
  • Return 100% of investor capital before the GP shares in sale or refinance profits

We also avoid structures that create misaligned incentives and always ensure proper alignment with the level of risk involved. For instance, if a long-term hold with a refinance is in the LPs’ best interest, the waterfall shouldn’t encourage a premature sale just to trigger GP profits. Economic logic—not structure—should guide strategic decisions.

Transparency Isn’t Optional—It’s Essential

We’ve made strategic investments to back our philosophy. That includes adopting Juniper Square, the gold standard as one of the industry’s most robust investor portal platforms. It provides our partners with:

  • 24/7 access to investment performance
  • Secure digital documents and reporting
  • Electronic payment and signature tools

This level of access fosters better communication and helps eliminate opacity, which is often where misalignment begins. Transparency is more than a feature—it’s a safeguard.

Final Word: Alignment Is Earned, Not Assumed

Alignment is not just a tagline—it’s the result of intentional choices:

  • Co-investing alongside our LPs
  • Minimizing and eliminating misaligned fees
  • Designing investor-first waterfall structures
  • Prioritizing transparency through industry-leading tools

If you’re considering investing in real estate syndications, ask the hard questions. How does the sponsor make money? Where are their incentives anchored? What skin do they have in the game?

Because in our view, alignment isn’t just good practice—it’s a prerequisite for trust.