![]() ![]() The specific terms usually include property details, investment timing, returns on capital pre-deployment, rights to additional investment, acquisition or management fees, third party fees, duty not to self-deal, calculation of IRR, and finally, in the event of a legal dispute, how that dispute will be resolved. Each of these stages represents different goals and rules for the general partner to abide by and it is difficult if not impossible to predict all scenarios at the outset. The Partnership Agreement sets the parameters of the expectations during acquisition, development (if any), ongoing operations, and ultimately the exit. This is often the only legal document that contractually binds the General Partner or sponsor of a deal with the investors. It is a critical document that defines a mutual understanding of financial terms, describes the roles each party plays, decision making for the project and how actual distributions are made after deducting valid expenses. general partner and limited partners) in a joint real estate investment. A Partnership Agreement outlines and describes the relationship between partnership entities (i.e.
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