To develop or acquire a real estate project, a sponsor may need
to attract an equity partner since lenders generally will not
finance 100% of a project's cost. Though there are many ways to
compensate a financial partner for putting equity in a deal, a
common scenario would be:
a.
Simple percentage of net cash flow from property
b.
Preferred return on investor capital, a negotiated share of
residual cash flow and priority distributions on sale
c.
Upfront cash fee...