All Forum Posts by: Hary Askenazi

I have invested in a number of multifamily deals via 2 different companies. One of them presented a new deal to me but I see there is an "origination fee" of 1.5% that goes to the managing partners of the LLC (they also are the property managers and take a 3% of gross as fee but only after 7% pref rate is returned annually). They also get 30% split of profits above 7% annual return.

The 1.5% origination fee is a commission essentially for bringing the deals to the investors and is paid as equity in the deal, not cash.

My questions are these:

1) Is an origination fee/commission standard for a scenario like mine?

2) What is a standard fee?

3) How is this fee justified if managing partners are getting a split of profits? Isn't that their "commission" for bringing the deal?