What fees do sponsors charge, and how do they affect my return?

Sponsor fees are what the deal sponsor — the general partner who finds, finances, and manages a property — charges for running the investment. They are set deal by deal in the offering documents, and they are separate from platform fees: on Invown, investors pay no transaction fees, and the platform fees issuers pay are listed in Fees & plans.

The common sponsor fees

• Acquisition fee — charged when the deal closes, for sourcing and negotiating the purchase. Typically 1–3% of the purchase price.
• Asset management fee — ongoing oversight of the investment, generally 1–2% of collected revenue or invested equity per year. It sits on top of any third-party property management fee, which often runs 4–8% of collected rent.
• Promote (carried interest) — the sponsor’s share of profits above a hurdle. Investors commonly receive a preferred return, often 6–8% a year, first; profits above that often split 70/30 to 80/20 in investors’ favor.
• Disposition fee — sometimes charged when the property sells, typically 0–2% of the sale price. Some deals also add refinancing, loan-guarantor, or construction management fees.

How fees affect your return

Upfront fees come out of the capital you contribute, so a higher acquisition fee means less of your money goes into the property itself. Ongoing fees reduce the cash available to distribute, and the promote reduces your share of any profits above the hurdle. Compare the total fee package over the whole projected hold period rather than any single line item: a deal with a low acquisition fee but an aggressive promote can cost you more than one with a higher upfront fee and a modest profit split.

What to check before you invest

Every fee should appear in the offering documents, such as the private placement memorandum and operating agreement. Be cautious when fees show up only in the fine print, when charges stack at every phase of the deal, when there is no preferred return before the promote, or when the sponsor invests none of its own money alongside yours. No single fee makes a deal good or bad — weigh the whole package against the sponsor’s track record and the deal’s fundamentals. Real estate investments involve risk, including possible loss of principal, and upfront and ongoing fees apply whether or not a deal performs well.

For worked examples, market benchmarks, and tax notes, read our full guide to syndication fee structures, and see our passive investor’s guide to real estate syndication for how the sponsor–investor relationship works. For questions about a specific offering, contact support.