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Why is the estimation of property level cash inflows and outflows often just the first step...

Why is the estimation of property level cash inflows and outflows often just the first step in determining the cash flows and returns expected by various investors in the ownership entity?

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Answer #1

The majority of commercial properties in the US are not purchased by individuals, but by multiple investors in the form of partnerships, LLCs, and other ownership entities

-So, in order to calculate a particular investor's cash distributions and returns, the property cash inflows and outflows must be allocated to the various investors.

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