Most investors focus on returns. Jonas focuses on protection first.
Here's how he structures his deals to create multiple layers of defense for investor capital:
Development Fee: 2% – Compensation for sourcing and managing the deal
Construction Fee: 3% – Payment for overseeing the build-out
Finance Fee: 0.5% – Compensation for arranging capital
Construction Contingency: 10% – Built directly into the project budget
Add it all up, and you've got 15-16% of the total project cost sitting as a cushion before investors feel any pain.
But here's where Jonas's approach gets interesting. Those fees aren't just padding his pockets—they're structured as sacrificial layers.
When Jonas presents to investors, he walks them through exactly how capital gets protected:
First line of defense: The 10% construction contingency absorbs cost overruns
Second line of defense: If contingency runs dry, developer fees go back into the deal
Third line of defense: Jonas and his partners will personally loan money to the entity rather than make a capital call
"This is how I'm gonna protect you and make sure that we got a big enough cushion that I'm not coming back to you and asking you for money," Jonas explains.
Jonas has identified three primary risk factors that can sink a real estate deal—and he's developed specific strategies for each:
Interest Rate Risk – Jonas uses interest rate hedges through firms like Chatham Financial to cap exposure, even on construction loans where banks won't offer fixed rates.
Construction Risk – The layered fee structure described above, where developer compensation becomes the buffer before investor capital gets touched.
Rental Performance Risk – Conservative underwriting that uses current market rents rather than projecting future increases, combined with a specific business model (slightly larger units, fewer amenities, lower price points than competitors).
In the current market environment, Jonas notes that recycling capital—getting your money back out of deals quickly through refinancing—has become extremely difficult. Deals that once returned capital in two years now require five to seven-year holds.
This makes downside protection even more critical. When you can't count on a quick exit, you need to ensure the deal can weather whatever the market throws at it.
The most sophisticated investors aren't just chasing returns—they're asking tough questions about protection. And the best developers aren't just promising upside—they're building structures that prove they have skin in the game.
When a developer is willing to forfeit their fees and personally backstop a deal before coming back to investors for more capital, that tells you something about how they think about the relationship.
As Jonas puts it: "At the end of the day, nobody is ever unhappy if you do a deal and say 'man, this thing didn't go well' and here's your money back."
The goal isn't just to make money. It's to never lose people's money first.