splitting profit interest among vertically integrated sponsor team?
Working on assembling my first real estate development deal. I'm coming at it from an architecture and urban planning background. I'm acting as the project manager/lead and I've assembled a team of partners with general contracting experience and property management experience. In addition to sponsoring the deal, we are self performing the general contracting, and the property management. I'd like to get reimbursed for our expenses in cash, including a reasonable valuation fo my team's time and business operating overhead, but would like to structure the deal such that our profit is realized through the profit interest in the project with a simple waterfall structure. The question we are facing is this: how to spilt the profit interest among our partners? The relative value of the development fee vs the general contracting fee vs the on-going property an asset management fees? In addition, our design team is contributing their profit margin as equity (about 20% of the total design fee). Is a 25% share to each of those four roles/responsibilities appropriate? (Maybe also worth mentioning that we are asking our investors to provide a limited guarantee, and we are offering a guarantor fee to acknowledge/compensate that risk.) Thanks in advance for any insight/feedback!
Dicta quas ea nulla debitis accusamus. Similique quo ut ipsum doloremque voluptas architecto inventore. Repellat officia aut quia eos rerum ut.
Facere quam et vitae nam est ut inventore. In sit aut nihil ut explicabo consequatur. Et assumenda ea non qui saepe quo et et. Quis facilis nulla ipsum excepturi et repellendus. Et maiores recusandae tenetur ea fugiat voluptatum. Accusantium accusamus quae est consequatur possimus quam consequatur dolorum.
Qui consectetur quo debitis ipsa temporibus esse. Incidunt nam laudantium earum ut ab. Repellat est fugiat veritatis. Voluptas aut voluptatem neque qui non pariatur aut dignissimos.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...