Private Real Estate Investment Fees Explained

Understanding if investment fees charged by a sponsor (aka GP or General Partner) are fair and appropriate is crucial to your success in private real estate investing as a passive real estate investor.

In this episode, I break down private real estate investment fees: types of potential fees, what fees are customary, what the going market rates are for these fees, and how they may impact your investment returns. And I close out the episode with a discussion on incentives these fees create.

Fees Covered in This Episode:

Transactional Fees:
➡️ Acquisition Fee
➡️ Debt Placement Fee
➡️ Equity Placement Fee
➡️ Loan Guarantee Fee
➡️ Disposition Fee
➡️ Refinancing Fee

Ongoing Management Fees:
➡️ Asset Management Fee
➡️ Admin / Organizational Fee
➡️ Property Management Fee
➡️ Leasing Fee/Commission
➡️ Construction Management Fee

Incentive Fees (Also referred to as "Performance Fee" or "Promote"):
➡️ Preferred Return (Compounding vs Non-Compounding) & (Cumulative vs Non-Cumulative)
➡️ Waterfall
➡️ Promote
➡️ Catch-Up

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Real estate is the most proven way to build wealth. But learning how to invest in real estate is not easy. You need a blueprint from other successful investors. That is what this podcast is all about.

In each episode, join Drew Breneman, a real estate investor who owns more than $200M in property, as he and his guests teach you what you actually need to know to be a successful investor. Whether you are a full-time active investor, a passive investor, close to retiring, just starting out, simply looking for an alternative to the stock market, this podcast is for you.

His company, Breneman Capital, is a private real estate investment management firm specializing in the multifamily property sector. Breneman Capital employs a deliberate investment approach, leveraging data analytics and proprietary technology to generate superior risk-adjusted returns for investors.

Breneman Capital has developed an investment strategy that aims to exploit market inefficiencies and reveal superior risk-adjusted opportunities through comprehensive use of technology and analytics.

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