The 3 Ways Passive Investors Get Paid in Real Estate Syndications

Most passive investors hear terms like preferred return, profit split, and capital stack but don’t fully understand what they mean—or how they impact actual returns. That confusion leads to hesitation or missed opportunities. In this episode, Mark Faris and John Makarewicz break down exactly how investors get paid in real estate syndications, using simple language and real-world examples.

They discuss:

✔️ Preferred Return – What it means, how it protects investors, and why it's the first bucket that gets filled before general partners get paid.

✔️ Profit Splits (Waterfall Structure) – How profits are divided after the preferred return is met, including the 70/30 and 50/50 splits—and how this aligns incentives between investors and operators.

✔️ Capital Stack – What it is, how it determines who gets paid first, and w ...