The Hotel Investor Playbook Real Estate Syndications 101: How Investors and Operators Actually Get Paid | Michael Russell E54
Oct 21, 2025
Discover the inner workings of real estate syndications, where investors and operators navigate fees, profit splits, and structures. Michael Russell explains the crucial roles of LPs and GPs, offering insights into preferred returns and the mechanics of financial waterfalls. He emphasizes the importance of simplicity in deals to attract repeat investors. Plus, learn about overlooked syndication risks and practical tools to enhance modeling and operations. This is your go-to guide for mastering hotel investments!
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Why Syndications Exist
- Syndications let investors pool capital to buy much larger assets than they could individually.
- They match passive capital with skilled operators to access off-market opportunities and asymmetric returns.
Charge Fair Operator Fees
- Charge appropriate fees: acquisition, asset management, and disposition fees are standard and should be included.
- Don't skip fees or undercharge, or you'll burn out and not sustain operations.
Basic Waterfall Mechanics
- Waterfalls govern how cashflow and event proceeds split between LPs and GPs.
- A typical structure pays LPs back capital first, then an 7–10% preferred return, then a profit split (e.g., 70/30 LP/GP).