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Do sponsors charge fees?

For real estate projects, sponsors have two primary compensation methods: 1) a profits interest or “promote” and 2) fees. Therefore, yes, sponsors can charge fees.

Fees can be collected at different stages of a project regardless of whether or not it is meeting expectations.  Also, fees are typically taken out before profits are calculated for purposes of an equity waterfall. Finally, fees are usually tied to specific tasks that the sponsor performs, such as negotiating and closing a property purchase, rather than overall project success.

CrowdStreet has required sponsors to list all fees on a dedicated tab on the offering details page. You will find this tab under the section “The Investment.”

 You can also find this and more detailed information within the offering documents. 

For more information on sponsor fees, please reference this article: Shining a Spotlight on Real Estate Sponsor Fees