Represents the income generated from the property after all expenses. Positive cash flow is key to a healthy investment.

Total income from a property, minus operating expenses, before taxes and financing costs. Used to gauge the property’s profitability.

A property’s net operating income, divided by its market value. It measures potential return, and is a common metric to compare properties.

A projected annualized return on the investment, accounting for both cash flows and sale profits. A key metric for fund investors.

Measures total return on an investment by dividing total cash distributions by the initial investment. An equity multiple over 1.0 indicates positive returns.

The use of borrowed funds to finance a portion of an investment. High leverage can amplify returns, but also increases risk.

A strategy of buying properties with improvement potential (like renovations or management changes) to increase income and value.

These are common investment strategies that range from low-risk, stable assets (Core) to high-risk, high-return assets (Opportunistic).

A minimum return that limited partners receive before general partners share in profits. Common in fund structures to prioritize LP payouts.

The entity or individual that finds, acquires, and manages the property. Often responsible for securing financing, and leading the project.

Refers to the quality of properties based on factors like location, age, and tenant profile. Class A is high-quality, while Class C may have more risk but potential for higher returns.

The detailed examination of a property and its financials before closing. Involves property inspections, rent rolls, and market analysis.

The ongoing management of properties, focuses on maximizing income, maintaining occupancy, and optimizing operating costs.

The plan for selling or refinancing an asset to return capital to investors. A clear exit strategy is crucial for fund planning.

Describes the structure of financing for a deal, including equity, preferred equity, mezzanine debt, and senior debt. Defines investor priority in case of liquidation.

Payments made to investors from property cash flow, often occurring quarterly or annually, based on the fund’s terms.

Defines how profits are split between general and limited partners, often with hurdles where the GP gets a larger share at higher returns.

Various fees that the fund manager charges to cover acquisition, ongoing management, or sale of assets. Investors evaluate these fees carefully.