b'Step 5: Calculate Your Split With Investors Next, you determine your split by dividing the target return you want to offer investors by the total annualized cash on cash return for the property. If you projected an overall annualized cash on cash return of 20% and you want investors to get a 15% annualized cash on cash return, you will use the following equation:15%targetreturn = 75percent 20%overallannualizedreturnIn this example, if you want investors to get a 15% annualized return, you will have to give them 75% of the deal. In other words, the profit split between investors (Class A) and management (Class B) would be 75/25. This is the equivalent of giving investors $225k/year and $75k/year to be split among the members of the asset manager.This is one of the reasons I say, Dont have more than 5 people in the asset management entity of a syndicate or fund. While 25% of a propertys annual earnings may seem like a lot of money, $75k/year carved up 5 ways might be as little as $15k per person per year. Dont quit your day job just yet; youll need a few more deals. How to Split Management Earnings Below is a model for carving up management of a syndicate or fund withrespecttoallocationofbothmanagersfeesandClassB(profit) distributions.200'