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Summary QuestionJames created a real estate syndication to purchase a multi-family building. He of
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James created a real estate syndication to purchase a multiQuestionJames created a real estate syndication to purchase a multi-family building. He offered to pay his investors an 8% return first, after which he will split the remaining profits 50/50. What is the 8% return referred to...? Preferred ...

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  • October 6, 2024
  • 2
  • 2024/2025
  • Summary

Subjects

  • james created a real estate syndication to purchas
  • after which he will split the remaining profits 5
  • the 8 preferred return means that investors will

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Question


James created a real estate syndication to purchase a multi-family building. He

offered to pay his investors an 8% return first, after which he will split the

remaining profits 50/50. What is the 8% return referred to...? Preferred Return

Liquidity Leverage




Answer & Explanation


The 8% return that James offered to pay his investors first is referred to as a

"Preferred Return."


Explanation:


1. Preferred Return:


o This is a common term in real estate syndications and private

equity investments. It refers to the priority payment given to

investors before any profits are split between the general partners

(like James) and the limited partners (the investors).

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