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Martini
LSU Fan
Baton Rouge
Member since Mar 2005
30346 posts

Questions on Comm Real Estate Management Agreement

Not sure how to set this up. Wife has a small % in a commercial building which was inherited. Several small stockholders, one with over 40%. How to set up a management agreement that ensures equal distribution of dividends?


kaaj24
LSU Fan
Dallazz
Member since Jan 2010
270 posts

re: Questions on Comm Real Estate Management Agreement
Are you asking about distributions or property management? Distributions should be defined in company agreement. Management fees are paid to property manager who is actively managing property. Investors usually get distributions unless they're involved in actively managing property.


Martini
LSU Fan
Baton Rouge
Member since Mar 2005
30346 posts

re: Questions on Comm Real Estate Management Agreement
I guess a company agreement. Not a management as per a realtor.

If one stockholder has close to 50% and ten or so have the other percentage how to safeguard the smaller investors to insure proper distribution of dividends. In other words how to keep the jackass from ripping the others off?


kaaj24
LSU Fan
Dallazz
Member since Jan 2010
270 posts

re: Questions on Comm Real Estate Management Agreement
Company agreement will generally specify that investors can receive financials quarterly. May or may not be audited. Review those and ask questions. A lot of these smaller deals you're investing in the GP as much as the actual investment.


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