The AAA Storage Podcast

In this episode, Paul Bennett demystifies the mechanics of investment waterfalls—how profits and returns are distributed between investors and sponsors. He explores the critical differences between American and European waterfall structures, why sponsor alignment and fee transparency matter, and how AAA Storage’s approach protects investor interests. Whether you’re new to private equity or looking to sharpen your due diligence skills, you’ll take away practical insights for evaluating real estate investment opportunities with confidence.

Chapters
(00:00) Understanding the Waterfall Structure
(01:26) Legal Governance and Transparency
(03:36) Incentives and Sponsor Alignment
(06:02) American vs European Waterfalls
(09:49) Distribution Priority and Capital Return
(12:47) Preferred Return and Split Rationale
(17:14) Simplicity vs Complexity in Waterfalls
(20:09) Fee Structure and Sponsor Profitability
(23:59) Complex Tiered Waterfall Examples
(27:41) Due Diligence and Fairness for Investors

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Download our free guides to take your investing to the next level:
10 Due Diligence Questions to Vet Any Real Estate Sponsor: https://www.aaastorageinvestments.com/info/10-due-diligence-questions-to-vet-any-real-estate-sponsor
First-Time Real Estate Syndication Investor Checklist: https://www.aaastorageinvestments.com/info/first-time-real-estate-syndication-investor-checklist