Where is the management cost in this co-living operator's numbers?

Ask for it in writing. If the answer is real they'll hand it over in a day, and if it isn't you've learned the thing you needed to learn for free.

Your arithmetic on the gap is the right arithmetic. Thirty rooms across six houses means roughly 30 to 45 leases signed a year at typical turnover, plus showings, plus a cleaner schedule, plus being the person who answers the call at 11pm about the kitchen. That is not 8% of gross work. Real in-house co-living operators I've read about run all-in operating overhead closer to 15 to 20% of collected rent once you count the leasing labor, and some carry a live-in house manager per property with a rent discount instead, which shows up as a revenue reduction rather than an expense.

So there are two possibilities. Either the 8% is a placeholder and their actual staffing costs sit somewhere else in the model, in which case ask them to point to it, or the model is understating expenses by roughly 60,000 a year across the fund, which on six houses is most of the projected distribution.

Specific things to request: headcount by role and salary, the leasing fee treatment, who pays for turn cleaning, and the last twelve months of actual bank statements for the two houses they own. Compare the actual operating expenses on those two houses to the per-house line in the pro forma. If the existing houses run at 19% and the fund model says 8%, you have your answer without anyone having to admit anything.

What any of this means for a fund interest specifically is a securities question and worth an hour with an attorney who does them.

The number I'd chase is different from @halyard's. Their two existing houses fill at within 25 dollars of pro forma, which is good, and it tells you nothing about vacancy because it's a snapshot of occupied rooms. Ask for room-nights occupied over the last twelve months divided by room-nights available. That's the one figure that separates a real by-room operator from someone with a nice rent roll on a good week. If they've never calculated it, that itself is information.