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Q. What are the projected returns?

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Each investment is different. Most investments are structured with a preferred return (pref) of around 8% typically. This means over the course of 12 months, you will receive monthly or quarterly (depending on the operator) distributions of 8%. For example, with a $100K investment on a quarterly distribution cycle, you would receive $2K each quarter in passive income.

We try to structure these investments to pay out an equity multiple of between 1.7x to over 2x of your initial investment. We also try to plan on a 5 year hold cycle, although earlier exits are not uncommon. We also have the flexibility to stay in the investment for a longer term if needed.

An example with an investment $100K over 5 years with an 8% prefand a 2x equity multiple would earn an additional $100K in income in that 5 year span.

An example of a typical distribution:
Year 1 – $100K at 8% = $8K (with a running total distribution of $8K)
Year 2 – $100K at 8% = $8K (with a running total distribution of $16K)
Year 3 – $100K at 8% = $8K (with a running total distribution of $24K)
Year 4 – $100K at 8% = $8K (with a running total distribution of $32K)
Year 5 – $100K at 8% = $8K (with a running total distribution of $40K)

Disposition of asset (sale) = $160K ($100K initial investment plus waterfall of $60K) with a total distribution of $200K, 2 times your initial $100K investment.