Real Estate Distribution Waterfall (WIP)


profile Peter Lynch, Private Equity Professional & ASimpleModel.com Founder
This is a simple example of a real estate distribution waterfall. There are 5 IRR hurdles controlling how cash flows are split between the limited partners (LPs or investors) and the financial sponsor (GP).

100% of the cash flows go to the LP until the LP has received a sum equivalent to the original investment plus a preferred return (8% in the model). After that the LP and GP split proceeds according to the different hurdles. No catch up is included.

This is not a complete model for a real estate property (search ASM website for "multifamily" for an example).


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