Question on Market Terms for Co-GP Capital

[Michael Gallagher]

Does anyone know what 'Market Terms' are for having a Co-GP investor with the following structure:

I (operator) source the property, do all of the work, handle all of the operations, reporting, etc.

Co-GP provides 90-98% of the GP equity required, and signs on the Loan Docs.  

We both work to find LP equity, Co-GP will provide LP equity if capital can't be raised. 

I'm wondering if the Co-GP would participate in the fee income (Acquisition Fee, Asset Management Fee) and/or what the split would be for the Co-GP on the promote. 

[Charles Carillo]

@Michael Gallagher

Usually, the fees generated will be shared across the GP using the percentages you have determined each GP member to have. For example; if a partner has a 10% share of the GP; they will receive 10% of fees that are generated. I believe what you need to determine is what the GP percentage is for each partner. 

Typically, the person running the deal (asset management) gets about 40%-50%, person sourcing/underwriting/due diligence on a deal gets around 5%-10% and signing on the loan about 5%-10% and providing risk capital is about 5%-10% of the loan. 

Seasoned operators will be giving away smaller amounts of the deal for; sourcing, signing on debt and risk capital.