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 why your position in the stack impacts your risk and return.
✔️ The Role of General Partners vs. Limited Partners – Who does the work, who brings the capital, and how responsibilities and liabilities are structured.
✔️ The Power of Leverage in Real Estate – How smart financing and disciplined execution can double your equity and preserve capital, even in volatile markets.
✔️ Simplicity and Transparency in Syndications – Why Mark and John built Faris Capital Partners to demystify complex investment terms and bring clarity to investors at every step.
Whether you're just getting started or looking to scale your portfolio with passive income and long-term wealth, this episode gives you the insight you need to invest with confidence.
➡️ Visit www.fulloutinvesting.com to check out our 10-step process and explore a sample deal.
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