Cottonwood Multifamily Opportunity Fund, Inc.

Key economics

Preferred return

9%

Hurdle rate

—

LP / GP split

50% / 50%

GP catch-up

Yes

GP clawback

—

GP commitment

—

Diligence findings (7 · 3 high/critical)

• high
  DDQ gap: Does the fund engage an independent auditor?The offering documents don't answer a standard institutional DDQ question (Governance). An allocator will ask this directly — the GP should be ready with an answer.
• high
  DDQ gap: Does the fund have a GP clawback provision?The offering documents don't answer a standard institutional DDQ question (Economics). An allocator will ask this directly — the GP should be ready with an answer.
• high
  Full (100%) GP catch-up to a 50% carryA 100%-rate catch-up routes every post-pref dollar to the GP until it has caught up to its full carry, before the LP sees any split. Combined with a high carry this materially front-loads GP economics. A graduated (e.g. 50/50) catch-up would keep the LP in the cash flow during the tier.
• medium
  A 9% preferred return is stated but no waterfall tier pays itKey economics declare a preferred return, yet none of the extracted distribution tiers reference a pref/hurdle or carry a threshold rate. A pref that lives only in the summary — not the distribution mechanics — may not be contractually enforceable.
• medium
  DDQ gap: Does the fund use a third-party fund administrator?The offering documents don't answer a standard institutional DDQ question (Governance). An allocator will ask this directly — the GP should be ready with an answer.
• medium
  DDQ gap: What is the GP's capital commitment (skin in the game)?The offering documents don't answer a standard institutional DDQ question (Economics). An allocator will ask this directly — the GP should be ready with an answer.
• low
  Waterfall splits to the GP with no explicit return-of-capital tierA residual GP split is present but no extracted tier returns the LP's contributed capital first. This is often an extraction nuance rather than a structural hole, but worth confirming against the distribution section.

DDQ readiness — 62% covered

8 answered · 1 partial · 4 gaps of 13 standard questions.