Short podcast-style YouTube episode (Freedom Real Estate Group, hosts Flip and Danny) explaining what a preferred return ("pref") is in real estate syndications — a payment priority that ensures limited partners receive distributions before general partners, aligning interests. The episode also promotes the hosts' Facebook/LinkedIn groups and website (Freedom Capital Investments) and ends with standard investment/disclaimer language.
Hey, everybody. Flip and Danny here, founders of the Freedom Real Estate Group family of companies, welcome to another episode of our podcast.
Freedom through Passive Income. That's right.
And today's episode is called what are preferred returns and why are they important?
Nice. And you were talking so fast, I was like, this isn't even one of the ones that we're going to be going. So preferred returns, they're very, very important. Whenever you're talking to somebody about an investment, you're going to be talking to them, is this a secured investment? Is it not secured? How do the returns work? And so I want you to understand what a pref or preferred means when you're talking to people specifically about larger investments like syndications, where you're pooling money together from multiple investors in order to invest in a large deal.
Right?
So there's going to be limited partners and general partners. Limited partners are the ones that are investing for the passive income. So, Flip, you're going to be a limited partner and you're going to invest $100,000 in a deal that I am giving to you as an opportunity. I'm going to do the work. You're just going to invest passively. So you're the limited partner and I'm the general partner in this example. Right. One of the questions you should be asking me is what type of returns am I getting? And they can be structured in so many different ways, it's crazy. But what you want to be listening for is am I getting a preferred return? Meaning that you're going to get paid before I get paid.
Right.
And why that's important is because we just aligned our interest. Right. Because you don't want me taking money out of a deal and not giving you your return. You want me to work hard at getting you your return and then I get money out of the deal.
That's right.
So I'm gonna work, work, work, work, work, because I don't want to work for free. I want to get you whatever it is that I promised you in terms of the structure of the deal. And then I'm gonna want to make money. So that's what a preferred return is. It means that our interests are aligned and that you are gonna get paid before I ever get paid.
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Yeah. So again.
When you guys are talking to people about investments, we are going to provide you so many, hopefully you never talk to anybody else. But if you do talk to other people, make sure you're asking smart questions. There are many other questions that I would advise you to say, and that's actually maybe a good idea for another episode is what are all the questions you should be asking about a syndication? You want to ask us about the same thing you want to ask other people. But the biggie here is preferred returns. And I really, really believe in it because I've seen other people lose money for different reasons because it wasn't a preferred return.
Right.
So that's all I've got for today.
That was an easy one.
Yeah. Thank you.
Again, make sure you join us on our Facebook groups or in our Facebook group to listen into our private conversations. That's right, because we've got everybody in there. You can go in there, you can talk about deals, you can make anonymous comments if you'd like. But again, that is facebook.com group freedom through passive Income. That's right. And then we also have a LinkedIn group. If you're not on Facebook, if you're not on Facebook and you're on LinkedIn. We also have a LinkedIn group, but just go to the search bar and.
Type in Freedom through Passive Income and.
You'Ll find the group that way.
Yes.
And then also we also have the links in the YouTube section of these videos. Yes, we do have the description of this video and so we do have the links in there. So you can go directly street down there and go directly to our links.
Trying to make it as easy as possible.
That's right.
We also have our website.
That's right. Which is right down here on the bottom, which is Freedom Capital Investments dot com.
That's fantastic.
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But again, we always like to end these all all these episodes with Invest Smart, Live Happy Bye Bye. Nothing on the show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions and information on the show are not guaranteed. All investment strategies have the potential for profit or loss.
