The Nick Huber Show Ep 176: Real Estate Private Equity 101
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Jan 6, 2025 Dive into the fascinating world of real estate private equity! Discover how these firms are structured and the intricate dynamics between general and limited partners. Learn essential terms like operating agreements and profit distribution that shape successful deals. Plus, hear personal anecdotes about recruitment challenges in the industry. Explore how risk assessments and market conditions play a crucial role in deal structuring. It's an enlightening journey into wealth-building through real estate!
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Real Estate Private Equity
- Nick Huber runs a real estate private equity company called Bolt Storage.
- He raises money from outside investors (LPs) to buy real estate.
Share Types
- Real estate private equity deals involve common and preferred shares.
- General partners (GPs) typically receive common shares, while limited partners (LPs) get preferred shares.
Preferred Return
- Preferred return, or "pref," is the percentage of yield promised to LPs before GPs get paid.
- It's calculated daily and accrues to an annual rate, like an interest rate.