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## What is a waterfall calculation in real estate?

Simply stated, a waterfall **describes the way cash available for distribution and profits in a project cascades through a series of calculations to make payments to the developer and their investors in** a pre-arranged hierarchical fashion. …

## How does an equity waterfall work?

Equity Distribution Waterfall Defined

In most equity waterfalls, **the profits of a project are split unevenly amongst the project’s partners**. Operating partners are given a disproportionately larger share of the profits if the project beats expectations. This extra slice of the pie is called the “promote”.

## What is waterfall calculation?

The waterfall calculations **clarify how returned capital will be divided between the investors and the fund manager, and in what order**. … In other words, this calculation uses a whole-of-fund model, so investors see returns faster.

## What is a waterfall payout?

What Is a Waterfall Payment? Waterfall payment structures require that **higher-tiered creditors receive interest and principal payments**, while the lower-tiered creditors receive principal payments after the higher-tiered creditors are paid back in full.

## What is a 50/50 catch up?

So, a typical deal might be stated as “20% carry over an 8% pref with a 50% catchup”. This means that the **partnership has to earn at least 8% return before the sponsor earns any carry**. Above an 8% return, the sponsor gets half the profit (i.e. the catchup is 50%) until the ratio of profit split is 20% to sponsor.

## What does 100% catch up mean?

In practice, in a deal with a GP Catch-Up clause, the LP **receives 100% of the property’s cash flow until their preferred return hurdle is reached**. Above the hurdle, the manager/General Partner receives 100% of the income and profits until they are “caught up” to their performance fee.

## What is waterfall arrangement?

A waterfall arrangement or waterfall payment scheme **describes the order in which creditors get paid**. Two common uses of the term are within the debt and private equity sectors. Any left over is then paid against the next most senior debt, up to a predefined limit, and so on down the chain. …

## How do you calculate waterfall pump size?

To determine the GPH/GPM needed for your waterfall or stream – **multiply the width in feet x 30 GPM**. Example: To build an “average” waterfall 3′ wide and 10′ high above the pond – multiply 3′ (width) x 30 GPM which equals 90 GPM or 5,400 GPH at 10 feet of head.

## What is the use of waterfall chart?

Waterfall Charts are used to **visually illustrate how a starting value of something (say, a beginning monthly balance in a checking account)** becomes a final value (such as the balance in the account at the end of the month) through a series of intermediate additions (deposits, transfers in) and subtractions (checks …