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1. You are putting together a deal to fund the acquisition of a medium-sized multifamily property in Morristown and need an additional $800,000 to close
1. You are putting together a deal to fund the acquisition of a medium-sized multifamily property in Morristown and need an additional $800,000 to close on the property. You set up a partnership agreement in the form of a simple promotion where you provide 5% of the required equity and the limited partners provide the rest period cash flows are distributed on a parri passu basis until reaching a 10% return. Any cash flows remaining after attaining the 10% hurdle are distributed based on the 80/20 promotion. The cash flows after debt service for the first three-year holding period are: 0 1 2 3 N CF from operations 30,000 85,000 100,000 CF from sale 975,000 Total (800,000) 30,000 85,000 1,075,000 a. How much equity do you contribute? How much equity is contributed by your investors? b. Fill in the missing values capital account corresponding to the 10% return hurdle
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