Annual investment management fee 0.75%
Annual tax and accounting fee 0.45%
Annual carried interest / promote 15% over 8% return
Maybe it's not as high when you consider that they purchase the property directly, but it still seems a bit too risky to lock myself into those high fees for 10 years.
I think the main benefit is the 7 year deferment of your capital gains, which given that your money will be compounding from that point onward, is a pretty significant break if you have a lot of gains you haven't triggered yet.
Main benefit has to be the zero capital gains you pay (on the new gain) if you are patient and hold for the full 10 years. Second benefit would be the cap gains deferral (negative interest loan).
Annual investment management fee 0.75% Annual tax and accounting fee 0.45% Annual carried interest / promote 15% over 8% return
Maybe it's not as high when you consider that they purchase the property directly, but it still seems a bit too risky to lock myself into those high fees for 10 years.
I think the main benefit is the 7 year deferment of your capital gains, which given that your money will be compounding from that point onward, is a pretty significant break if you have a lot of gains you haven't triggered yet.