Syndication Fees Syndicate Fees- Are these normal????
- Acquisition fee 2.95% of purchase price of asset
- Disposition fee 1% of sale price of asset
- Asset management fee: 1% of equity raised
- Fund admin fee: .25% of equity raise
Their waterfall is 70/30 split until 13% IRR then 50/50
Most Popular Reply
I think 1% for the acquisition fee since when I am explaining to investors I want to be able to speak with conviction when I tell investors my goal even if the deal goes bust is to pay the investors, first.
Supposing, you do a $5 million property at 3% = $150,00. That is a ton of money for just putting the deal together and 1% or $50,000 is still more than enough money.
A syndicators first goal is to make their investors feel safe and you pay them, first. Personally, I would not pay you 3% because syndicating and putting deals together is not all that complicated. You can either do it or maybe you should not.