b'Raising all of the money from private investors to acquire commercial real estate rarely works as a commercial lender will typically require less in interest payments than private investors want as a return on investment. By leveraging the investment with a bank loan, the asset manager boosts the yield on the cash contributed by investors. This boost generally yields a sufficient cash on cash return to pay investors a return on their investment in the mid to high teens, while paying the asset manager 20-50% share of profits.How Do You Know if a Property Works for Syndication or a Fund? The asset manager must identify one or more real estate assets that will generate a sufficient cash on cash return to pay investors (and the asset manager) a portion of distributable cash or available cash. Distributable cash is cash left over after paying property expenses, debt service (loan payments), asset management fees, and withholding reserves.Distributable cash can be generated from making improvements and increasing rents for value-add properties (cash flow), or by developing new buildings that can be sold or rented. Distributable cash can also be generated by refinancing the property with a higher loan amount after value has been added or development has been completed, or by realizing the equity generated by selling the property after improvement or development and achieving a stabilized period of occupancy. A refinance or sale is called a capital transaction.12'