#53:8% Preferred Return Doesn't Make Your Investment Safer

Does an 8% preferred return actually make your investment safer?

Many passive investors (LPs) see an attractive preferred return and immediately assume the deal carries less risk. But a preferred return is not a guarantee of your principal—it's simply part of the distribution waterfall.

In this video, I explain what preferred returns really mean, how GP compensation and fee structures affect investor alignment, and the questions every LP should ask before investing in a real estate syndication.

A preferred return is just one piece of the puzzle. Understanding the entire economic structure of a deal is far more important.

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