The Hidden Cost of Real Estate Syndication Fees

Описание: In this episode of Mechanics of Money, Sam Silverman breaks down how real estate sponsors actually get paid, and why fee structures quietly shape the returns you experience as an investor.

Most pitch decks focus on projected IRR and equity multiples. But those are deal-level returns. Sam walks through the difference between deal-level and investor-level performance, showing how acquisition fees, asset management fees, disposition fees, and promote structures change what actually hits your account.

Using a real $200,000 example, we model how a 3% acquisition fee, when applied to a leveraged deal, becomes 7.5% of your equity on day one. Layer in ongoing asset management fees, exit fees, and promote, and the gap between an 18% projected IRR and what you actually experience can be meaningful.

Sam closes with five due diligence questions you can take into any real estate syndication conversation.

If you’ve been following the series, this is the layer that sits before the waterfall, the economics that operate before profits are even split.

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⏱️ TIMESTAMPS:
00:00 The Incentive Problem with Acquisition Fees
00:38 Fees: The Layer Before the Waterfall
03:09 Acquisition Fees & Leverage Explained
06:08 Disposition, Legal & Construction Fees
08:41 Deal-Level vs Investor-Level Returns
09:31 The $200K Example: Where the Gap Forms
11:52 Why Fees Don’t Shrink When Returns Do
14:07 How to Evaluate Fee Structures
17:11 Five Questions to Ask Any Sponsor

Disclaimer: The content provided in this podcast is for informational purposes only and does not constitute financial or investment advice.