The private equity firm does not "promise" a return to its limited partners. It is a potential upside ROI, and includes risks of failure to achieve the return. The use of the word "promise" is only valid in a loan, not an equity investment.
Hey, Justin --- Great content. But I just have two questions, though: With regards to the Acquisition Fees (#1) and Disposition Fees (#4), does the Fund Manager require a Real Estate license to benefit from these fees? Or are they exempt from Real Estate licensing requirements since they are principals of the fund that is making the R/E acquisition and disposition? And with regards to Asset Management Fees (#2) and Promoted Interest (#5), does the Fund Manager require a Securities license (Series 65) to benefit from these fees? Or are they exempt from Securities licensing requirements? Thanks.
Nice - I've never worked in general private equity outside of real estate, but from what I understand, the fee structures and waterfall/promote structures are generally pretty similar. Interesting to hear that's the case with your company. Thanks for the comment!
Hey can this still be done on a MUCH smaller scale? Like if I wanted to pool some money together from some friends and purchase a property 100k-500k? Would it still be done the same buying residential housing rather than commercial?
Hey Nikhil, these are additional fees on top of brokerage commissions. Brokerage commissions go to the broker, disposition fees go to the GP. GPs will manage construction of major renovation projects or tenant suite build outs, which can require a lot of time and energy on their part.
Great video. As the GP, would it be adversely deemed fair if you included all these fees in your fund or should you try to mitigate your fees as much as possible? For example, would it be frowned upon to charge investors a disposition fee if you still earn a carried interest in the deal as the fund? What combination of these fee structures are most common in the space?
In my experience, funds are created w/ all of the fees mentioned in the video. The only contingency is there might be earn-out caps. In theory if you are hitting all of the promotes / hurdles, the investors should be making enough of a return where they are happy to pay.
I am new to the stock market. Every stock that I bought so far, I was out of luck because I bought them when they were expensive. I feel I missed out on all the stock opportunities so far for the tech stocks.I believe having 175K yearly income would be a good investment so I want to plug all my savings into the stock market. I know this sounds a bit dull but I would like to know if I should learn investing or let somebody else (more capable like a FA) do it for me? Please share your thoughts. I am kind of tired of searching for a good stock to buy and losing all the good opportunities..
Keep it simple in the beginning. Buy something, like an index fund, and hold. Educate yourself in the meantime and elevate your risk tolerance over time.
@@bridgetrussell5903 In order to make profits from trading you need loads of experience and a well defined strategy, which most traders don't have. If you trade without the proper preparation, you're most likely to lose your,,,,,, money,,,, . Identify the buy/sell,,,,, ratios,,,,, an,,,, d identify,,,,,, the market,,,,,, leaders and,,,,,, most importantly.
report is a colossal failure. To bring the housing market to a halt, the FED will have to pull all the stops. The unfortunate,,,,,,,, issue,,,,, is that other markets,,,,,,,, are,,,,, being,,,,,, decimated,,,,,,,, . If you,,,,, want to
@Jeanie Emest You are right! I diversified my 450K portfolio across various market with the aid of an investment coach, I have been able to generate a little bit,,,, above 1.3m in net,,,,, profit,,,,,, across,,,,, high dividend yield stocks,,,,,, , ETF and,,, bonds,,,,, during,,,,, this red season
JUDITH LEKA RILEY 👈👈👈 is the analyst/brokerage-adviser. She has been of great help and her tutelage has brought me to a higher understanding of profit generation. You can,,,,,, look up her,,,,,, name on the,,,,,, net for,,,,, her page ,,,, and,,,,,, reach out,,,,,, . She Understands the,,,,,, job perfectly.
I like your videos but am wondering why your business does not come up when I search the better business bureau website nieither Breaking Into CRE nor JBK Enterprises, LLC shows up.
Hi Mary, I'm not registered with the BBB - I haven't felt the annual fees to be necessary for my business. I have over 5,200 reviews on my courses on Udemy with one of the highest ratings on the platform, which I think speaks a lot more to the quality of my paid training than paying for an accreditation. I wasn't aware this was a concern of some of my viewers, though, so thank you for pointing this out!
Hi are these fees charged annually. for e.g. 500m fund 1% management for every year? Or is it just 1% once capital is raised and thats it for the life of the fund?
I understand acquisition fees for core deals but do you still charge full acquisition fees on a build from scratch where the development fee is very high?
Yeah there are land transfer costs, legal etc...So you might have Land: 100, Land Transfer Cost 1.5 (1.5%), Legal .25 (.25%) etc... So Land Acquisition = (100 + 1.5 + .25) = 101.75
Awesome Video, can you tell me who pays the Acquisition fees? Is it paid by the limited partners? In addition to the amount invested? or is it baked in in advance? Also, you say “if” you can get the debt, can you tell me more about what it takes to be able to secure good debt? Does a general partner need to have a really high net worth?
Hey Elliott, the acquisition fees are included in the total cost to close the project (usually paid through escrow), so the LPs are paying that fee to the GP, but indirectly through closing (not cutting a direct check to the GP). Securing debt depends a lot on your experience as a GP. If you're just starting out and buying smaller (
Hey Elliot, the acquisition fees are included in the total cost to close the project (usually paid through escrow), so the LPs are paying that fee to the GP, but indirectly through closing (not cutting a direct check to the GP). Securing debt depends a lot on your experience as a GP. If you're just starting out and buying smaller (
Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
We Are in Unchartered Financial Waters! every day we encounter challenges that have become the new standard. Although we previously perceived it as a crisis, we now acknowledge it as the new normal and must adapt accordingly. Given the current economic difficulties that the country is experiencing in 2024, how can we enhance our earnings during this period of adjustment? I cannot let my $680,000 savings vanish after putting in so much effort to accumulate them.
Keeping some gold is usually a wise decision. You would be better off keeping away from equities for a bit or, even better, seeking advice from an expert given the current market conditions and everything that is at risk with the current economy.
This was great, I have been researching "group funded real estate" for a while now, and I think this has helped. Have you ever come across - Ponasson Estate Earthman - (search on google ) ? Ive heard some decent things about it and my m8 got cool success with it.
The private equity firm does not "promise" a return to its limited partners. It is a potential upside ROI, and includes risks of failure to achieve the return. The use of the word "promise" is only valid in a loan, not an equity investment.
thanks started a role on the external reporting end of a REPE firm, this is helpful.
it would be helpful if you provided examples with arbitrary numbers
Hi May I check where does all the fund admin cost lies? Is it in Management fees? Or it should be separately deducted from the fund Cashflow?
Hey, Justin --- Great content.
But I just have two questions, though:
With regards to the Acquisition Fees (#1) and Disposition Fees (#4), does the Fund Manager require a Real Estate license to benefit from these fees? Or are they exempt from Real Estate licensing requirements since they are principals of the fund that is making the R/E acquisition and disposition?
And with regards to Asset Management Fees (#2) and Promoted Interest (#5), does the Fund Manager require a Securities license (Series 65) to benefit from these fees? Or are they exempt from Securities licensing requirements?
Thanks.
@BreakintoCRE great video. Can you touch on how much capital the GP will be expected to commit as a percentage of the deal?
I work in a company that does basically this but with a specific type of business as opposed to real estate.
Nice - I've never worked in general private equity outside of real estate, but from what I understand, the fee structures and waterfall/promote structures are generally pretty similar. Interesting to hear that's the case with your company. Thanks for the comment!
Hey can this still be done on a MUCH smaller scale? Like if I wanted to pool some money together from some friends and purchase a property 100k-500k? Would it still be done the same buying residential housing rather than commercial?
Yes, the same underlying concepts would apply.
Exactly the contact I’ve been searching for
thanks so much for the simple explanation!! love your videos
How different is disposition fees different from a brokerage? Didn't understand what construction management activities that GPs carry out?
Hey Nikhil, these are additional fees on top of brokerage commissions. Brokerage commissions go to the broker, disposition fees go to the GP. GPs will manage construction of major renovation projects or tenant suite build outs, which can require a lot of time and energy on their part.
Really good information and very clear and concise. Thank you!
Great video. As the GP, would it be adversely deemed fair if you included all these fees in your fund or should you try to mitigate your fees as much as possible? For example, would it be frowned upon to charge investors a disposition fee if you still earn a carried interest in the deal as the fund? What combination of these fee structures are most common in the space?
In my experience, funds are created w/ all of the fees mentioned in the video. The only contingency is there might be earn-out caps. In theory if you are hitting all of the promotes / hurdles, the investors should be making enough of a return where they are happy to pay.
@@jacobkardanimoghaddam1852 thank you. Much appreciated for this.
I am new to the stock market. Every stock that I bought so far, I was out of luck because I bought them when they were expensive. I feel I missed out on all the stock opportunities so far for the tech stocks.I believe having 175K yearly income would be a good investment so I want to plug all my savings into the stock market. I know this sounds a bit dull but I would like to know if I should learn investing or let somebody else (more capable like a FA) do it for me? Please share your thoughts. I am kind of tired of searching for a good stock to buy and losing all the good opportunities..
Keep it simple in the beginning. Buy something, like an index fund, and hold. Educate yourself in the meantime and elevate your risk tolerance over time.
@@bridgetrussell5903 In order to make profits from trading you need loads of experience and a well defined strategy, which most traders don't have. If you trade without the proper preparation, you're most likely to lose your,,,,,, money,,,, . Identify the buy/sell,,,,, ratios,,,,, an,,,, d identify,,,,,, the market,,,,,, leaders and,,,,,, most importantly.
report is a colossal failure. To bring the housing market to a halt, the FED will have to pull all the stops. The unfortunate,,,,,,,, issue,,,,, is that other markets,,,,,,,, are,,,,, being,,,,,, decimated,,,,,,,, . If you,,,,, want to
@Jeanie Emest You are right! I diversified my 450K portfolio across various market with the aid of an investment coach, I have been able to generate a little bit,,,, above 1.3m in net,,,,, profit,,,,,, across,,,,, high dividend yield stocks,,,,,, , ETF and,,, bonds,,,,, during,,,,, this red season
JUDITH LEKA RILEY 👈👈👈 is the analyst/brokerage-adviser. She has been of great help and her tutelage has brought me to a higher understanding of profit generation. You can,,,,,, look up her,,,,,, name on the,,,,,, net for,,,,, her page ,,,, and,,,,,, reach out,,,,,, . She Understands the,,,,,, job perfectly.
Great channel and info. Thanks
where is the link for crash courses
Hi Kanwaljit, the link is in the description of the video.
I like your videos but am wondering why your business does not come up when I search the better business bureau website nieither Breaking Into CRE nor JBK Enterprises, LLC shows up.
Hi Mary, I'm not registered with the BBB - I haven't felt the annual fees to be necessary for my business. I have over 5,200 reviews on my courses on Udemy with one of the highest ratings on the platform, which I think speaks a lot more to the quality of my paid training than paying for an accreditation. I wasn't aware this was a concern of some of my viewers, though, so thank you for pointing this out!
Excellent! Thank you
Hi are these fees charged annually. for e.g. 500m fund 1% management for every year? Or is it just 1% once capital is raised and thats it for the life of the fund?
asset management fees usually yearly
I understand acquisition fees for core deals but do you still charge full acquisition fees on a build from scratch where the development fee is very high?
Yeah there are land transfer costs, legal etc...So you might have Land: 100, Land Transfer Cost 1.5 (1.5%), Legal .25 (.25%) etc... So Land Acquisition = (100 + 1.5 + .25) = 101.75
Hi Justin i need more info
Really nice video. Since we have some clients from gulf , Can you please make a video on Murabaha role in Real Asset .
How do u find these clients from the gulf?
Very Nice video keep posting . Acknowledgement from India.
Thank you!
Are PE firms almost always the General Partner?
REPE sounds a lot like being a broker
Awesome Video, can you tell me who pays the Acquisition fees? Is it paid by the limited partners? In addition to the amount invested? or is it baked in in advance?
Also, you say “if” you can get the debt, can you tell me more about what it takes to be able to secure good debt? Does a general partner need to have a really high net worth?
Hey Elliott, the acquisition fees are included in the total cost to close the project (usually paid through escrow), so the LPs are paying that fee to the GP, but indirectly through closing (not cutting a direct check to the GP).
Securing debt depends a lot on your experience as a GP. If you're just starting out and buying smaller (
Hey Elliot, the acquisition fees are included in the total cost to close the project (usually paid through escrow), so the LPs are paying that fee to the GP, but indirectly through closing (not cutting a direct check to the GP).
Securing debt depends a lot on your experience as a GP. If you're just starting out and buying smaller (
@@BreakIntoCRE it does! Thank you very much. Do you have any insights on non recourse loans?
@@elliotabel4840 yes - I made a video on this recently: th-cam.com/video/6-BegImGVe8/w-d-xo.html
Hey, interested in the free crush course
Hey Anthony, the link for the Crash Course is in the video description.
Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
We Are in Unchartered Financial Waters! every day we encounter challenges that have become the new standard. Although we previously perceived it as a crisis, we now acknowledge it as the new normal and must adapt accordingly. Given the current economic difficulties that the country is experiencing in 2024, how can we enhance our earnings during this period of adjustment? I cannot let my $680,000 savings vanish after putting in so much effort to accumulate them.
Keeping some gold is usually a wise decision. You would be better off keeping away from equities for a bit or, even better, seeking advice from an expert given the current market conditions and everything that is at risk with the current economy.
This was great, I have been researching "group funded real estate" for a while now, and I think this has helped. Have you ever come across - Ponasson Estate Earthman - (search on google ) ? Ive heard some decent things about it and my m8 got cool success with it.