Syndication Fees and Waterfalls Explained
Acquisition fees, asset management fees, preferred returns and promotes: what's typical and how they change what you take home.
Read →For Pilots, engineers & high-W-2 professionals
For pilots, engineers and high-W-2 earners: passive done right
Strong, steady income and analytical habits. Put both to work evaluating deals, and be clear-eyed about what real estate losses can and can't offset.
Why it comes up
Why high-w-2 professionals look at private real estate
- Steady high income with limited time for active real estate.
- Analytical comfort with spreadsheets and assumptions.
- Long careers that suit long hold periods.
What to watch
Considerations specific to you
- Passive losses generally don't offset W-2 wages.
- Run sponsor projections through your own downside cases.
- Diversify by sponsor rather than chasing the highest projected IRR.
Accreditation
How accreditation usually applies
Most private real estate offerings are limited to accredited investors. Sponsors using Rule 506(c) must verify your status.
- Income test: $200,000+ individually or $300,000+ jointly in each of the last two years, with the same expected this year.
- Net worth test: $1 million+, alone or with a spouse or spousal equivalent, excluding your primary residence.
Summary of SEC rules for education. Confirm your status with your advisor; sponsors may request documentation. See who qualifies.
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Educational content only; not investment, tax or legal advice, or an offer to buy or sell any security.