The Multifamily Real Estate Experiment Podcast

MFREE 123 Trailer # 5 with Tyler Lyons: What Should Investors Look for Beyond Returns?

Shelon Hutchinson Season 3 Episode 123

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0:00 | 1:29

Aloha, It’s Shelon "Hutch" Hutchinson here! If you’re enjoying 'The Multifamily Real Estate Experiment' podcast, please like, comment, and share our episodes to help us reach and inspire more people. Thank you for your support!

Experience shortens the learning curve. 📈🧠

In this episode, Tyler explains how talking to operators, reviewing dozens of deals, and asking better questions helps investors develop real judgment. Alignment of interest isn’t a buzzword — it’s found in the details: fees, waterfalls, profit splits, and who actually gets paid only if the deal performs. 

 

Over time, patterns become clear, and disciplined investors learn to recognize when incentives reward stewardship instead of speed. The goal isn’t perfection — it’s understanding who truly wins with you. 🤝

#LeadershipMindset #InvestorEducation #MultifamilyInvesting

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Email me at:
hutch@hsquaredcapital.com

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Track 1

Talking to people like you, Hutch, I know you raise a lot of money, you invest with different sponsors, like folks like you in the industry who actually do see a lot of deals. You Can help people kind of speed up that learning process. Get out there, talk to sponsors. Look at a lot of deals and try to understand what a good deal looks like. When you talk to sponsors some things that more savvy and sophisticated, LPs are gonna look for, they're gonna look for alignment of interest. And what do I mean by alignment of interest? understanding a few different things, like what are the fees that the GP is charging to the LP investors? What's the waterfall structure and what does that look like? What's the preferred rate of return? What's the profit split between the GP and the LP investors? Putting that story together of how the deal is structured. It's one of those things when you're new, it's gonna be difficult for you to know and ascertain whether or not there really is alignment of interest. But if you go through and look at 20, 30 different syndicated deals, now you're gonna be able to see like, okay, this guy charges a 5% acquisition fee. This guy charges a 2% acquisition fee. And this guy charges a 90 10 split. So most of his compensation is coming right at the get go when the deal is closed. But this guy's got a lower acquisition fee, and a, 70 30 profit split. So more of his compensation is coming in the form of the promoted interest. So This guy really needs to perform in order to actually get paid to run this deal.