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Should I Invest in Real Estate Directly or Through REITs and REIT ETFs?
October 29, 2022
Many financial advisors and RIAs adhere to the asset allocation model pioneered by David Swensen, who managed the Yale endowment. During Swensen’s hugely successful tenure at Yale, he emphasized diversification into non-correlated assets and a long-term, low-fee approach to investing. Swensen invested directly into private real estate because he believed these were the only investments…
How Do We Align the GP and LP Interests in Our Real Estate Syndications?
October 10, 2022
In a real estate syndication, the general partner (GP) and the limited partners (LPs) each have different interests and roles. The GP typically takes on a more active role in acquiring and financing the property and making day-to-day management decisions during the hold period, while the LP’s role is typically much more passive and limited…
What is a Waterfall in a Real Estate Syndication and Why is it Important?
September 21, 2022
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 governing documents. The most obvious goal of a…
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