CalculateRealEstateROI

ROI Metrics

Preferred Return

Minimum return owed to LPs in a syndication before sponsors share profits.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Plain-English explanation

Investors get paid first up to a hurdle (often 7-8%) before the sponsor earns promote.

Examples

  • 8% pref then 70/30 split is common in multifamily syndications.

Common mistakes

  • Confusing pref with guaranteed return — it accrues but isn't always paid.

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