[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  The Real Estate God [@TheRealEstateG6](/creator/twitter/TheRealEstateG6) on x 131.6K followers Created: 2025-07-22 14:13:02 UTC Why is real estate private equity so lucrative? Because you basically get a 2x return on your capital before the deal even starts Let’s take a sample deal: $10MM purchase price. The deal will be purchased with a $7.5MM loan and $2.5MM of equity. The PE firm will put in XX% of the equity ($250k) and the remainder will be funded from investors Fees: the PE firm will take an acquisition fee, yearly asset management fees and a promote - Acquisition Fee (1% of purchase price): $100k - Asset Management Fee (2% of invested equity): $50k/yr. Assume X year hold, so $150k So before the deal has even started, you’ve made $250k of guaranteed fees ($100k acquisition fee + X years of $50k AM fees) You only put in $250k of equity into the deal. So if you sold the deal back for what you bought it for, you’d get a 2x return just based on “guaranteed” fees That doesn’t even count the actual return from the deal or the promote (20-30% of your investor’s profits) Once you account for those, you should be in the 3x+ range for the return on your capital with minimal risk A “good” deal pushes you into the 5x+ range. Basically can get 3-5x returns in X yrs for average performance Obviously you don’t want average performance and the continued success of your business is based on you generating real returns for your investors (has to be a win-win) But it’s quite simply one of the best business models on the planet and it’s why REPE firms make so much money If you’d like to learn how to do this yourself, I teach this process in my Acquisitions Bootcamp (apply below) XXXXXX engagements  **Related Topics** [acquisition](/topic/acquisition) [$250k](/topic/$250k) [$25mm](/topic/$25mm) [$75mm](/topic/$75mm) [$10mm](/topic/$10mm) [2x](/topic/2x) [private equity](/topic/private-equity) [coins real estate](/topic/coins-real-estate) [Post Link](https://x.com/TheRealEstateG6/status/1947661166882263053)
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The Real Estate God @TheRealEstateG6 on x 131.6K followers
Created: 2025-07-22 14:13:02 UTC
Why is real estate private equity so lucrative?
Because you basically get a 2x return on your capital before the deal even starts
Let’s take a sample deal:
$10MM purchase price. The deal will be purchased with a $7.5MM loan and $2.5MM of equity. The PE firm will put in XX% of the equity ($250k) and the remainder will be funded from investors
Fees: the PE firm will take an acquisition fee, yearly asset management fees and a promote
- Acquisition Fee (1% of purchase price): $100k
- Asset Management Fee (2% of invested equity): $50k/yr. Assume X year hold, so $150k
So before the deal has even started, you’ve made $250k of guaranteed fees ($100k acquisition fee + X years of $50k AM fees)
You only put in $250k of equity into the deal. So if you sold the deal back for what you bought it for, you’d get a 2x return just based on “guaranteed” fees
That doesn’t even count the actual return from the deal or the promote (20-30% of your investor’s profits)
Once you account for those, you should be in the 3x+ range for the return on your capital with minimal risk
A “good” deal pushes you into the 5x+ range. Basically can get 3-5x returns in X yrs for average performance
Obviously you don’t want average performance and the continued success of your business is based on you generating real returns for your investors (has to be a win-win)
But it’s quite simply one of the best business models on the planet and it’s why REPE firms make so much money
If you’d like to learn how to do this yourself, I teach this process in my Acquisitions Bootcamp (apply below)
XXXXXX engagements
Related Topics acquisition $250k $25mm $75mm $10mm 2x private equity coins real estate