CalculateRealEstateROI

ROI Metrics

Distribution Waterfall

The tiered order in which cash flow and profits are distributed in a syndication.

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

Plain-English explanation

Defines who gets paid when — return of capital, pref, then split tiers with rising sponsor share.

Examples

  • Tier 1: 8% pref; Tier 2: 80/20 to 12%; Tier 3: 70/30 above 12%.

Common mistakes

  • Ignoring catch-up provisions that benefit sponsors.

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