Capital Reserve Funds: Mathematically Calculating the Required Cash Hold for a Commercial “Rainy Day”
In the highly reactive, yield-obsessed arena of commercial real estate syndication, the amateur syndicator navigates the fiscal year with a fatal, completely delusional sense of financial invincibility. They acquire an aging, multi-million-dollar commercial asset and immediately distribute 100% of the Net Operating Income (NOI) to their Limited Partners to artificially inflate the year-one cash-on-cash return.…