It depends, 8% pref is vague, it could mean cash-on-cash, it could mean IRR (IRR has that return of capital piece to it). And you aren't guaranteed to get your pref in the first year, it is simply a target hurdle before cash flows are split differently. If returns aren't strong enough to reach it, the cash flow split just stays the same until that pref is met.
@@RobBeardsley-LoneStarCapital Thanks so much for confirming! An excellent video. In the future it would be useful to have an examination of the real implications of different waterfall structures on investor returns.
@@michaelrogawski657 Thank you and agreed. Here is a good video that touches on this subject from a few years ago: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-niZ92hXa1nA.html
