Reasonable Fees as LP
Hi there! I'm new here and would love to poll the group on what are reasonable fees to pay as an LP in a deal. I've been introduced to a local group in TX who focuses on rehabbing class B and C multifamily properties in and near Houston. I'm looking at investing in their latest deal (~$25M purchase with 80% LTV) project. The GP will be doing all the work and I'd be just sitting back collecting checks. I want to make sure the GP is fairly compensated but not pulling too much cash out of the deal as compared with other deals you guys and gals have seen.
The GP has already entered into contract to purchase. GPs also run the property management company and construction company. GPs are providing a personal guarantee on the debt. How does the below fee structure stack up to other deals you all have seen?
Acquisition Fee - 1%
Debt Arranger Fee - 1%
Loan Guarantee Fee - $25k per guarantor
Waterfall - 10% pref. and 80/20 above 10%
Asset Management Fee - 2% of Gross Rev
Property Management Fee - 4% of Gross Rev
Construction Supervision Fee - 5% of construction spend
Expense Reimbursement - Expenses billed to the property