In REIA Professional, beginning in version 18, one can indicate syndication fees – initially for acquisition, ongoing for your operational efforts and finally at the sale, for disposition.
We receive questions about these fees including:
- Why don’t the fees affect the IRR and other returns of measure?
- I want to include a non-operating expense related to the partnership
- Why don’t the fees affect the required cash investment (cell D7 on Cash Flow and Resale Assumptions)?
As a general rule, data entries on the Partnership Analysis sheet have no effect whatsoever on earlier sheets such as Cash Flow and Resale Analysis. So the acquisition fee, the asset management fee and the disposition fee affect only the partnership calculations. None of these affect the property-level IRR or the required cash investment.
If you have an “acquisition fee” that you want to affect the required cash investment, then don’t list it in cell E46 of Partnership Analysis. Instead, list it as part of closing costs, cell D8 on Cash Flow & Resale Assumptions, or one of the rows under “Detailed Closing Costs” on Advanced Features.