“ I eventually invested in a number of successful transactions with [PropFund] and enjoyed better than satisfactory returns.”
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Investment Structure

Historically real estate purchases are financed with approximately 75% debt to capital ratio. However, due to the present market and capital conditions, few lenders are currently willing to provide loans for purchases that the Fund targets: Class B and C commercial properties.

Consequently, the Fund initially invests on an all cash basis. In some instances and at a future date financial institutions will enter the market again and provide financing for Class B and C properties. When that time comes the Fund will be extremely conservative as it relates to the debt levels secured on the assets of the Fund.

Asset Management Fee

The fund and General Partners take NO FUND ASSET MANAGEMENT FEE. The majority of investment funds today charge a 2% management fee on the capital raised. This management fee is paid to the General Partners BEFORE THE preferred return is paid to the investors.

The General Partners of PropFund, LP also do not participate in a practice termed “Catch Up Return” which has also become a common practice for real estate funds. Basically, a “Catch Up Return” is a portion of the proceeds, usually 2% – 4%, that the investors do not participate in, only the General Partners receive the “Catch Up Return.”We at PropFund LP do not agree with this practice.

Furthermore, all start up expenses have been paid by the General Partners and these expenses will not be reimbursed by the Fund, as is the market norm for similar real estate investment funds.

Disposition Splits

The limited partners of the fund receive a preferred return from the profits of the Fund before the General Partners participate in the profits generated by the Funds investments. The General Partners make nothing from the profits generated by the Fund’s investments until the Limited Partners receive their preferred return.