Real Estate Investing Glossary

A comprehensive reference for real estate investing terminology, securities compliance concepts, and Fund Flow-specific terms.

Investment Structures

Syndication

A real estate syndication pools capital from multiple investors to acquire, manage, and profit from a property. In Fund Flow, syndication deals are tracked through the full lifecycle — from fundraising to exit.

Fund

A pooled investment vehicle that may hold multiple properties or assets. Unlike single-asset syndications, a fund diversifies across deals.

Joint Venture (JV)

A partnership between two or more parties to develop or invest in a property, sharing profits and risks according to an agreed-upon structure.

GP (General Partner)

The operator or sponsor of the deal. The GP is responsible for finding the deal, managing the asset, and executing the business plan. In Fund Flow, GPs have Operator-level access.

LP (Limited Partner)

The passive investor who provides capital for the deal but does not have day-to-day management responsibilities. LPs access Fund Flow through the Investor Portal.

Securities & Compliance

PPM (Private Placement Memorandum)

A legal disclosure document provided to prospective investors. It describes the investment opportunity, risks, terms, and the background of the sponsor. Fund Flow's Micro-Funds feature generates PPMs automatically.

Operating Agreement

The legal document governing an LLC's operations — including member rights, profit distribution (waterfall), and management responsibilities.

Subscription Agreement

The contract an investor signs to commit capital to a deal. Fund Flow tracks subscription status and can send these for e-signature via Documenso.

Regulation D (Reg D)

SEC regulation that allows companies to raise capital through private placements without full SEC registration. Fund Flow supports both exemptions:

• Rule 506(b): Up to 35 non-accredited investors allowed; no general solicitation permitted
• Rule 506(c): Only accredited investors; general solicitation permitted but verification required

Accredited Investor

An individual with income over $200K ($300K joint) for two years, or net worth over $1M (excluding primary residence). Required for 506(c) offerings.

KYC / AML

Know Your Customer / Anti-Money Laundering — identity verification and compliance checks required for investor onboarding.

K-1 (Schedule K-1)

A tax form issued to investors showing their share of the partnership's income, deductions, and credits. Investors can download K-1s from the Fund Flow Investor Portal.

Deal & Return Metrics

ARV (After Repair Value)

The estimated value of a property after all renovations and repairs are completed. This is a critical metric for "Rehab" type deals in Fund Flow.

IRR (Internal Rate of Return)

A metric used in financial analysis to estimate the profitability of potential investments. It is the discount rate that makes the net present value (NPV) of all cash flows equal to zero.

Equity Multiple

Total distributions divided by total invested capital. An equity multiple of 2.0x means the investor doubles their money.

Cash on Cash Return (CoC)

A rate of return that calculates the cash income earned on the cash invested in a property. Calculated by dividing annual pre-tax cash flow by total cash invested.

Cap Rate (Capitalization Rate)

Net Operating Income divided by property value. Used to compare relative value across properties.

NOI (Net Operating Income)

Total revenue from a property minus operating expenses (excluding debt service and capital expenditures).

LTV (Loan-to-Value)

The ratio of a loan amount to the appraised value of the property. A key risk metric for lenders and investors.

DSCR (Debt Service Coverage Ratio)

NOI divided by total debt service (principal + interest payments). A DSCR above 1.0 means the property generates enough income to cover its debt.

Waterfall & Distribution Terms

Waterfall

A hierarchical structure that determines how profits are distributed among investors and the sponsor. Typically flows: return of capital → preferred return → promote splits.

Preferred Return (Pref)

A minimum annual return paid to LPs before the GP receives any profit share. Common prefs are 6-10%.

Promote (Carried Interest)

The GP's share of profits above the preferred return threshold. For example, a "20% promote above 8% pref" means the GP receives 20% of profits after LPs have received their 8% preferred return.

Hurdle Rate

The return threshold that must be met before the next tier of profit-splitting kicks in.

Capital Call

A request from the GP to LPs to contribute committed capital, typically when funds are needed for acquisition or operations.

Distribution Notice

Communication to investors about an upcoming cash distribution — including amount, timing, and tax implications.

Loan & Debt Terms

Amortization

The process of gradually paying off a loan through regular payments of principal and interest. Fund Flow supports four amortization structures: Fully Amortized, Interest Only, Balloon, and Flat.

Interest Only

A loan structure where the borrower pays only interest during the loan term, with the full principal due at maturity.

Balloon Payment

A large lump-sum payment due at the end of a loan term, typically after a period of interest-only payments.

Bridge Loan

Short-term financing used to bridge the gap between acquisition and permanent financing or sale.

Origination Points / Fees

Upfront fees charged by a lender, expressed as a percentage of the loan amount. One point equals 1% of the loan.

ACH (Automated Clearing House)

Electronic payment system used for recurring loan payments. Fund Flow integrates with Plaid for ACH payment processing.

Property & Deal Types

Multifamily

Residential properties with multiple units (apartments, duplexes, townhomes). One of the most common asset classes in real estate syndication.

Commercial Real Estate (CRE)

Non-residential properties including office, retail, industrial, and hospitality assets.

Value-Add

An investment strategy that improves a property through renovations, better management, or repositioning to increase its value and income.

Stabilized

A property that has reached consistent occupancy and cash flow, typically 90%+ occupancy for 12+ months.

Entity Structures

LLC (Limited Liability Company)

The most common entity structure for holding real estate investments. Provides liability protection and pass-through taxation.

Series LLC

A special LLC structure where each "series" operates as a separate entity with its own assets and liabilities, commonly used for multi-property portfolios.

Limited Partnership (LP)

A partnership with at least one general partner (unlimited liability) and one or more limited partners (liability limited to investment).