Newbie here!
I would like to understand how preferred equity works.
Situation: An investor invests $1,000,000 preferred equity with 10% preferred return over a 5 year term.
Do I pay off $1,000,000 with the 10% preferred return every year e.g $200,000 per year plus interest in year 1, and then the balance plus interest every year, or do I pay the preferred interest of the balance every year and make a balloon payment at the end of year 5?
Understanding Preferred Equity
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