Real Estate Deal Structuring: Introduction to the Waterfall Framework

Partnering with other investors? Learn how to use the waterfall framework to track and share the profits from real estate deals involving multiple investors.

Introduction

• Course overview

1. Investing with Others

• Why invest with others?
• Risks of investing with others
• Intro to the waterfall framework

2. The Waterfall Examples

• Waterfall examples overview
• No waterfall
• Two-tier waterfall
• Three-tier waterfall
• Four-tier waterfall
• Waterfall example summary
• Which waterfall to use

3. Money-Losing Investment

• What happens if the investment loses money?
• Waterfall example: Money-losing investment

4. Additional Examples

• Rental income with waterfall
• Fix and flip with waterfall
• Restaurant startup example
• Parking garage example
• Other situations ideal for waterfall

5. Closing Thoughts

• Closing thoughts on investing with others

6. Bonus Materials

• Waterfall modeling deep dive overview
• Modeling out the preferred return
• Modeling an IRR hurdle and cash multiple hurdle
• Modeling out the catch-up
• Wrapping up the waterfall model