Typically, investors can expect to find projects that are structured as followed:
Preferred return (pref): 6-9% (LP’s take 100% of distributable cash until they reach the preferred return.)
Internal rate of return (IRR): 16-22% (a time-sensitive rate at which an investor’s money grows, annually, over the life of the project). Changes to expected IRR (both positive and negative) will be directly related to changes in exposure to risk.
Cash-on-cash (CoC): 8-12% (a rate of return that determines the cash income on, or in proportion to, the cash invested measured annually)
Equity multiple: 1.7-2.3x (on a $100K investment, LPs earn $170-$230K, including return of initial investment)