Adam and Dustin tackle one of the most misunderstood aspects of private real estate investing: general partner (GP) compensation. If you’ve ever wondered why deal sponsors take 20% of profits or bristled at acquisition fees, this episode dives deep into the economics behind GP fee structures and why they’re actually designed to benefit passive investors (if done correctly).

The conversation ranges from real-world examples of fee arrangements, complex waterfall structures that incentivize outperformance, and why transparency in fee disclosure sets private deals apart from traditional Wall Street investments.

Key topics include the difference between upfront fees and performance-based compensation, why preferred returns aren’t always investor-friendly, and how to recognize when fees become problematic versus when they create proper alignment between sponsors and investors.

Whether you’re evaluating your first syndication or comparing multiple sponsors, this episode provides a framework to assess fee structures like a seasoned investor.

Watch episode on YouTube: https://www.youtube.com/watch?v=0EHFF3Om5j0

See all Wealth Independence episodes at https://www.wealthindependencepod.com

Connect with Dustin:

• Big Spring Capital
• LinkedIn (/in/TheDustinBailey)
• Twitter/X (@TheDustinBailey)

Connect with Adam:

• Bidwell Capital
• LinkedIn (/in/AdamJPenn)

This show is for informational purposes only and is not financial, investment, legal, or tax advice, and does not constitute an offer to buy or sell securities. All investments carry risk, and investors should always conduct thorough due diligence and consult with qualified professionals before investing.