CalculateRealEstateROI

Multifamily · Guide

Multifamily Syndication Basics

Sponsor + LP investors structure; SEC compliance; preferred return + waterfall.

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

Key takeaways

  • Sponsor raises equity from accredited investors.
  • 506(b) or 506(c) SEC exemption.
  • 8% preferred return standard.
  • 70/30 waterfall typical.
  • Securities attorney mandatory.

Core concepts

Sponsor role

Acquire + operate + report.

LP role

Capital + passive.

Waterfall

Pref then split.

Step-by-step framework

  1. 1Securities attorney.
  2. 2PPM + operating agreement.
  3. 3Investor pipeline.
  4. 4Close + report.

Common mistakes to avoid

  • DIY documents.
  • 506(c) without verification.
  • No annual K-1 timeline.

Frequently asked questions

Investor minimum?

$50–100k.

Sponsor fees?

Acq 1–3%, asset mgmt 1–2%.

Pref rate?

7–9%.

Waterfall split?

70/30 to 80/20.

Action checklist

  • ☐SEC counsel.
  • ☐PPM.
  • ☐Investor CRM.
  • ☐Annual K-1 schedule.

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