What's happening everybody? Welcome back to this week's segment of the no limit minute. And this week, we're going to try to actually keep it to the three to five minutes that I initially one of these episodes to be anyway, although I've gotten some really great feedback from you guys.

On how many people truly enjoy this episode because of its straight to the point, no fluff going over all of the nitty-gritty detailed information about how to do specific things or what's going on in the market or just really quick.

Consumable information in these these shorter episodes, but anyway, now here I am talking about it now it's not going to be three to five minutes, but jumping in what I wanted to talk about today is GP syndication structure.

So there's probably a lot of you out there that are already investing in multifamily or interested in investing in multifamily or what have you.

And you either already have done some deals, you haven't done some deals and you're curious about what are the possibilities of the breakdown, the structure from an objective approach of GP equity.

I'm sure a lot of you guys have probably already heard of, you know, I'll just raise money for you. I'll be a capital razor. And then I'm sure you've probably also heard what you can't just raise cash it's illegal. You have to also actually do something in the deal.

So what are you going to do and how much equity are you going to get for just raising capital, because at the end of the day you're setting out to do this business to invest in this business to be a part of this to put in the work because you want to make more capital.

And that may be the near term goal, the long term goals spend more time with your family or have financial freedom, but you have to make money to be able to achieve longer term bills.

So what does the structure look like when you do it? Well, I'm going to go over what are kind of industry standard rule of thumb approaches when we look at every deal and the breakdown of how people, how GPs are going to be given equity in the asset.

So in this particular example, we're about to cover let's say it's the industry standard of 70 30 split.

So 70% of the whole deal equity is going to go to all of your passive investors and 30% is going to go to all of your general partners, your active sponsors.

And out of that 30% here is how that is divvyed up. So 100% of the 30% is what we're talking about.

So 7.5% is going to be given to lead sourcing deal flow acquisition, someone who actually found the deal, got it under contract got the signed L.O.I. or actually has it under PSA purchasing sale agreement and is now bringing it to call it someone else or maybe you're just doing it all in house.

I don't know, but let's 7.5% of the total allotted 30% GP equity goes to the person that actually got the deal under contract.

Another 7.5% goes to L.O.I. to closing. So someone who's actually going to be doing all of the due diligence, the team that's going to be constructing all of the underwriting that's going to be doing all of the

all like actually executing on all the due diligence all the way to closing and making sure that the whole entire team and everything is on track.

Kind of the manager of making sure everything's on track all the way to the closing table oftentimes the person that actually source the deal is usually also the person that has that follows it through all the way to the closing table, which then ends up they end up having around 15% of the deal at that point.

But also oftentimes you'll find the people manage like managing responsible for everything going to the closing table ends up being one or two people those one or two people then split that 7.5% share.

Now 10% of the total allotted amount is going to go to the individual investing risk capital. This is going to be someone actually putting in the cash for the earnest money deposits or for the due diligence expenses hiring the third party company.

For the lender fees for travel fees for any additional fees that are going to be out of pocket required to get the deal actually to the closing table at which point you're going to reimburse be reimbursed all those funds.

If you actually close the deal so it's called risk capital because there's a risk that the deal doesn't get closed and you don't actually get that money back so for putting your capital up front first at risk to go through this process.

That person or those people get 10% of the GP equity in the deal.

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