In this episode, Nico from the Small Axe Communities explains the various ways multifamily investors, specifically General Partners (GP) and Limited Partners (LP), get paid. Nico discusses the income sources for GPs, including acquisition fees, asset management fees, capital event fees, and disposition fees, offering practical insights from personal experiences. The episode also covers how LPs earn returns based on their investments, typically receiving an 8% preferred annual return, paid monthly, prior to any GP profits. Additionally, it touches on profit splits when returns exceed the preferred rate and the structure of 'waterfall' payouts. Listeners are encouraged to understand deal structures thoroughly and to reach out for further advice, concluding with a call to action for sharing and reviewing the show.

00:00 Introduction to Multifamily Investing

00:41 Understanding General Partnerships

01:08 The Role of Acquisition Fees

01:58 Justifying Acquisition Fees

04:02 Asset Management Fees Explained

05:01 Challenges in Asset Management

06:03 General Partners' Compensation Breakdown

08:14 Limited Partners' Earnings Explained

09:42 Preferred Returns and Incentives

11:22 Waterfall Structures in Deals

11:50 Final Thoughts and Contact Information

12:00 Closing Remarks and Gratitude