CalculateRealEstateROI

ROI Metrics

Promote (Carried Interest)

Sponsor's share of profits above the preferred return hurdle.

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

Plain-English explanation

How sponsors get paid for performance — typically 20-30% of upside after LP pref.

Examples

  • After 8% pref, sponsor takes 30% of profits, LPs take 70%.

Common mistakes

  • Underestimating how much waterfall structure changes IRR.

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