A $100,000 Syndication Investment, Wire to Sale: A Worked Example
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A $100,000 investment in a syndication moves through a set of steps: you subscribe, your wire sits in escrow, the deal closes, you receive distributions, and you get sale proceeds at the end. What you finally receive depends on how the plan goes. In the hypothetical example below, the same investment returns about 1.3 times, about 1.06 times or 0.65 times the amount invested. The numbers are made up to show the mechanics, not a forecast or a target.
If you are the sponsor, we built DoorRaise so investors can see each step. This guide is for investors who want to see the sequence with numbers. It sits beside the J-curve and reading a projected returns table.
The steps from wire to sale
| Step | What happens | Timing |
|---|---|---|
| 1. Review | You read the offering and confirm you are accredited | Before you sign |
| 2. Subscribe | You sign the subscription agreement | Before escrow closes |
| 3. Fund | You wire $100,000 to the deal's escrow account | After escrow opens |
| 4. Close | The company buys the property and escrow releases funds | Per the purchase contract |
| 5. Hold | Distributions are paid from available cash, often quarterly | Years 1 to 5 |
| 6. Exit | The property is sold, the loan repaid and proceeds distributed | Around year 5, if on plan |
| 7. Taxes | You receive a K-1 each year and report your share | Every year |
Three scenarios, same $100,000
These are hypothetical. All figures are before taxes. The sale proceeds are what you receive at the exit, after the loan and costs and after the sponsor's share.
| Topic | On plan | Below plan | Loss |
|---|---|---|---|
| Year 1 distributions | $1,000 | $0 | $0 |
| Year 2 | $3,000 | $1,500 | $0 |
| Year 3 | $5,000 | $3,000 | $1,000 |
| Year 4 | $6,000 | $3,000 | $2,000 |
| Year 5 | $6,500 | $3,000 | $2,000 |
| Distributions total | $21,500 | $10,500 | $5,000 |
| Sale proceeds to you | $110,000 | $95,000 | $60,000 |
| Total cash back | $131,500 | $105,500 | $65,000 |
| Equity multiple | 1.32 | 1.06 | 0.65 |
| Gain or loss on $100,000 | +$31,500 | +$5,500 | -$35,000 |
The totals are simple sums. The on-plan case returns $131,500 on $100,000, a multiple of about 1.3. The below-plan case returns $105,500, about 1.06. The loss case returns $65,000, so you lose $35,000. The loss case does not mean the investment is worthless, only that the sale price came in well below plan.
What changes between the scenarios?
- Occupancy and rents. Lower income means smaller distributions and a lower sale value.
- Costs. Renovations that run over, higher insurance or taxes reduce cash.
- Interest rates. A higher rate on a floating loan cuts cash and raises the buyer's required return.
- The exit. A higher exit cap rate means a lower price. See exit cap rate assumptions.
- Time. A longer hold delays your money. See extended holds.
What about the preferred return and splits?
The sale proceeds in the table already reflect the waterfall. In many deals, investors receive their capital and a preferred return before the sponsor takes a share of profits. See the waterfall and promote and what a preferred return is. In the loss case, the sponsor's profit share is small or zero because there is no profit.
What would the tax picture look like?
Each year you receive a K-1 showing your share of income or loss, which may be low because of depreciation even in a year with cash. At the sale you report gain, and part may be taxed as depreciation recapture. Passive loss rules can limit deductions. See tax forms, depreciation recapture and K-1 Box 19.
How to use this example
- Ask the sponsor for the same table for the deal you are considering, with a downside case.
- Compare the plan case with the sponsor's record of results. See what a failure rate means.
- Decide whether you could live with the loss case.
Frequently asked questions
Is 1.3 times a typical result?
No figure here is typical. The example is arithmetic. See target returns.
Where is IRR?
IRR needs exact dates. Ask the sponsor for it or use a spreadsheet function.
Will I get all my money back at the end?
Only if the sale proceeds and distributions cover it. In the loss case, you do not.
Are distributions guaranteed?
No. See are returns guaranteed.
Does the sponsor take fees from this?
Yes, fees and the profit share come out before your numbers. Ask for the net figures.
Sources
- SEC, Private placements under Regulation D: investor bulletin
- IRS, Partner's Instructions for Schedule K-1 (Form 1065)
- IRS, Publication 925, Passive Activity and At-Risk Rules
The example is hypothetical, simplified and not a projection. This article is general information as of November 2026, not legal, tax or investment advice. Talk to a securities attorney and a CPA about your deal. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.