What Does Preferred Return Mean? 

Preferred return refers to the minimum rate of return that an investor expects to receive on their investment in a particular project or venture. This rate is often expressed as a percentage and is paid to the investor before any profits or returns are distributed to the other investors or stakeholders in the project.

Preferred return is often used in private equity and venture capital investments, where the investor takes on a higher level of risk in exchange for the potential for higher returns. In these cases, the investor will typically receive a preferred return before any profits are distributed to the other stakeholders, such as the company's founders or employees.

Preferred return is often set at a fixed rate, but it can also be tied to the performance of the investment. For example, an investor might receive a preferred return of 8% if the investment performs as expected, but a higher rate of return if the investment outperforms its benchmarks.

Preferred return is an important consideration for investors, as it helps to ensure that they receive a minimum level of return on their investment, even if the project or venture does not perform as well as expected. It also helps to align the interests of the investors with those of the company or project, as the investors will have a vested interest in the success of the venture.

Want to learn more about a different way to invest in real estate? Download our FREE Passive Investor's Guide to Multifamily Syndications and begin your path to financial freedom!

Stay Up to Date 

Sign up for our newsletter to receive monthly market updates, new investment oppportunities, and upcoming educational webinars! 

Ready to Invest?

We invest in strong markets and asset classes in the United States. Our investors benefit from owning real estate through syndications, an investment vehicle that investors have turned to for attractive annualized returns and cash flow.

Let's Get Started

Have Additional Questions?

Legal Disclosure

The information displayed on this page is strictly for informational purposes and does not guarantee future results.