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Updated about 1 year ago on . Most recent reply

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86
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Adam M.
  • Investor
  • Texas (DFW & West Texas)
55
Votes |
86
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What exactly is meant by "the promote"?

Adam M.
  • Investor
  • Texas (DFW & West Texas)
Posted

Howdy BP,

Was speaking with a fellow sponsor who operates all over Texas' primary markets.

There is a deal we were looking at collaborating on and he mentioned we could receive a portion of the "promote". I have done a fair bit of research/sniffing around but it seems this term varies market to market.

I took it to understand the equity split on the sponsor side let's say 80/20... the 20 being "the promote" for the sponsor? .. not sure if that's right? Any clarity anyone could kindly please provide on this term, would be much obliged! 

Many thanks in advance,

A

Most Popular Reply

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5,089
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Scott Mac
  • Austin, TX
5,135
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5,089
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Scott Mac
  • Austin, TX
Replied

A wise way to do business is to have the person you do not know what they meant, tell You specifically what they meant.

Such as during the conversation saying something like, hey Bob I'm not exactly sure what you meant by XYZ, can you tell me more about that?

It is vitally important to have good clear communication with your business partners, investors, vendors, property managers, etc...

No one in here will know exactly what he meant.

The wise move would be to get on the phone with him and ask him that question directly, and if the answer is complicated write the answer down and repeat it to him ensuring that you understand it.

Good Luck!

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