Simple Cash Flow Waterfall
In a previous post on understanding the relationship between a GP and an LP, I touched on how the General Partner contributes a small portion of the required equity, but will generally earn a return in excess of their pro-rata contribution. In effect, the GP earns two streams of income from the property, including: 1) Their pro rata share of the investment (e.g. 10% equity contribution), and 2) A "promoted" interest in the investment returns after some return hurdle is achi