Get Every Definition for Key Real Estate Fund Management Terms

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A recurring fee paid from property revenues to the general partner for asset management.

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A fee charged on a buyer for taking over a mortgage from the seller of the property. The buyer agrees to make monthly payments for the assumed mortgage.

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Increase in the value of a property as per time.

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Appraisal is a valuation of a property estimated by an authorized person. It is estimated for taxation, insurance purposes and to determine possible selling price of a property.

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The opposite of passive investing. An active investor does all the work of sourcing, structuring, managing and exiting investments.

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Making independently designed applications work together in one interface, by accessing data and functionality.

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Pooling resources from numerous passive investors through a sponsor to acquire, execute, and resale an apartment building.

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The schedule of monthly mortgage (re)payment is called as Amortization. Usually, a reducing interest is charged, and on regular payments, more amount goes into the principals.

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Form of compensation earned by the general partner in a syndication in exchange for sourcing, vetting, securing financing and closing on a new investment asset.

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Accredited investors are individuals qualified to invest in apartment syndications by having annual income of $200k, or $300k for joint income, or a net worth of $1M (not including the primary residence).

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Automated Clearing House (ACH) uses its network for bank to bank electronic money transfer in the USA. Users can transfer money from their bank account to any other bank account using ACH Payment facility.

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An investing backed by active participation of the investor in the venture. Active investing may include sourcing of the opportunity, management of funds, and administrative work to manage the asset invested in.

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If ACH is unable to collect funds from the customer's account, a three character code is given as a result, which briefs about the reason for return. This code is known as ACH Return Code.

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Absorption Rate in real estate investing scenario is the rate at which available properties are sold in a given time phase. It is calculated by dividing the number of properties sold in a given time, by the total number of available properties.

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Short term investor loans to leverage equity in one property to fund another or access equity as cash for a down payment on a new acquisition.

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The occupancy rate required to bear all the expenses of a multifamily real estate property. It is the ratio of the sum of operating expenses and debt service and the gross potential income (through rents, parking fees, etc.)

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The capitalization rate is calculated by dividing net operating income by the current market value of a property in order to determine a forecasted rate of return.

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