Question
You have found a great property to invest in. The purchase price is $1,000,000. Both you and your investor partner recently won the lottery, so
You have found a great property to invest in. The purchase price is $1,000,000. Both you and your investor partner recently won the lottery, so you dont need any loan. Here is how you agreed to structure your investment: You Investor Share of initial capital 12% 88% Each will earn a preferred return of 7.0% 7.0% After the pref is paid, you will split the cash 55% 45% If year 1 cash flow is $100,000, answer the following: a. What are each of the partners investment? b. What is each partners year 1 preferred return? c. What is each partners year 1 profit split? d. What is each partners year 1 cash on cash return
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