How to Read a Syndication's Projected Returns Table
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A projected returns table in an apartment syndication is a set of outcomes that follow from assumptions, not a forecast. To read it, find the assumptions behind it (rent growth, expense growth, exit cap rate and hold period), confirm whether the returns are net of fees and your share of the waterfall, and ask for a downside case in the same format. Whatever the table shows, the actual result can be lower, and you can lose some or all of your investment.
This post is part of our guide to real estate syndication. It is written for accredited investors reading a sponsor's offering summary. Rules and examples are as of October 2026.
What does the table usually contain?
Most offering summaries show income and the sale for each year of the hold: net operating income, debt service, cash flow after debt, distributions to investors and sale proceeds. They may then summarize with an equity multiple, an internal rate of return (IRR) and an average cash-on-cash return. See equity multiple, IRR and cash on cash for what each measure tells you.
Which assumptions drive the numbers?
| Assumption | Why it matters |
|---|---|
| Rent growth | Small yearly changes compound into large changes in sale value |
| Expense growth | Taxes and insurance can rise faster than rent |
| Exit cap rate | A lower exit cap rate raises the sale price; see exit cap rate assumptions |
| Renovation timing and cost | Delays reduce income and push out the exit |
| Hold period | A longer hold lowers the annual rate of return on the same total |
| Interest rate | Floating-rate debt changes cash flow |
Ask the sponsor to show where each assumption comes from. Rent growth should connect to comparable rents, not to the sponsor's hope. See rent growth assumptions.
Are the returns gross or net?
Ask whether the figures are for the property, for the whole equity, or for you as an investor in your class after fees and the sponsor's share of profits. The investor-level figure is the one that applies to you. Check the waterfall in the operating agreement; see the syndication waterfall. The word "target" also matters: a target is a goal, not a promise. See target returns.
Worked example: base case and loss case (hypothetical)
This is an invented example for illustration, not a projection or a benchmark. An investor commits $100,000 for a five-year hold.
| Case | Distributions over five years | Share of sale proceeds | Total back | Equity multiple |
|---|---|---|---|---|
| Base | $25,000 | $115,000 | $140,000 | 1.40x |
| Lower | $12,000 | $100,000 | $112,000 | 1.12x |
| Loss | $5,000 | $80,000 | $85,000 | 0.85x |
In the base case the investor receives $140,000 on $100,000, a 1.40x multiple. In the loss case the investor receives $85,000, a $15,000 loss. The same building, with a lower sale price and weaker income, moves from a gain to a loss. Ask the sponsor which assumptions would produce the loss case, and how likely each is on current data.
What questions should you ask?
- What are the assumptions in the downside case?
- What happens to distributions if occupancy is lower than planned?
- At what exit price do investors get their capital back? At what price do they lose?
- How did the sponsor's past projections compare with actual results? See what a track record should show.
- Is the exit cap rate higher than the purchase cap rate?
Our take
Our take: the single most informative line in a projection is the sale price at which investors just get their money back. It tells you how much room the plan has, and it is a number a sponsor can usually produce in a few minutes.
Trade-offs and who this is not for
A table cannot capture everything. A careful downside case still rests on assumptions, and no case covers every event. This guide is not for anyone looking for a return they can count on; no such number exists in a private real estate offering, and the documents will say so.
How DoorRaise fits in
DoorRaise does not set or review a sponsor's projections. The deal page presents the sponsor's figures, labeled as projections, and the offering documents say projections are not guarantees. DoorRaise never promises or implies returns. See offering documents.
FAQ
What is a good projected IRR?
There is no universal answer, and we give no benchmark. Judge the IRR by its assumptions, its timing and the downside case.
Why do projections differ so much between sponsors?
Because assumptions differ. Rent growth, exit cap rate and hold period each move the result.
Should I trust a target return?
Treat it as a goal. Ask what has to be true for it to be met and what happens if it is not.
Should the sponsor show me a downside case?
Yes. If the sponsor cannot or will not, that is information.
Sources
- Investor.gov: Investor Bulletin, Private Placements Under Regulation D
- Investor.gov: Investor Alert, 10 Red Flags of an Unregistered Offering
- 17 CFR 240.10b-5: Employment of manipulative and deceptive devices (Cornell LII)
The examples are simplified illustrations, not projections, benchmarks or offers. This article is general information as of October 2026, not legal, tax or investment advice. Every investment can lose money. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.