Multifamily Deal Rates

[Matt Wills]

Hello,

I am looking at investing in a 200-unit multifamily complex and am interested in feedback on the following fee structure and terms.

Fees:

• 2% of Project cost for an upfront development fee, which would be 5.7% of the equity raised
• 4% of Revenue collected for property management
• 1% of Revenue collected for asset management

Terms: Investors will be paid a 7% annual non-compounding preferred return on unreturned capital, then 75% of the proceeds to a 15% IRR, and 65% of the proceeds thereafter. Profits (after debt service) will be distributed in this order:

1. Investor return of capital
2. Investor 7% preferred return
3. 75% LP/25% GP to a 15% LP IRR
4. 65% LP/35% GP thereafter