Preferred Equity and Why We Love It

Posted on January 16, 2020

Preferred Equity | Investment | Real Estate Developers | CGI StrategiesWhen it’s time for an investment’s profits to be distributed, where you are in line matters.

The fact is, with any investment, you are always taking a risk.  That’s just part of the deal – and when you do your research and invest in real estate wisely, the risk drops.

The issue is, if you’re consistently investing in real estate, you need cash flow.  So, where is the happy medium?

Preferred equity.

At CGI, we like preferred equity.  When it’s time to distribute the profits, our investor partners are not last in line, plus preferred equity leads to consistent cash flow. 

There a few trade-offs, of course.  It’s a bit more expensive upfront and our team is locked into the percentage of profits, even if the investment skyrockets.

In today’s market, cash flow is an absolute necessity to make a healthy profit. Preferred equity gives our investor partners the edge in the market and allows them to maximize their investing power. For us, we are able to take on more profitable projects that give our investors the maximum ROI.

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