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Real Estate Terms
Every master was once a beginner. Learn these terms and discover your potential to syndicate!

Accredited Investor

A individual is considered “accredited” as it pertains to investing in apartment syndications if they have an annual income of $200,000, ($300,000 yearly income if married) for the last two years, or has a net worth over $1 million either individually or jointly with a spouse. 

Active Investing

An active investor is involved in locating, structuring, financing, and managing real estate investments. This is the opposite of passive investing, such as a limited partner in apartment syndication.

Acquisition Fee

The advance fee earned by the general partner in an apartment syndication for finding, assessing, screening, financing, and closing the investment deal.

Apartment Syndication

An apartment syndication is a partnership formed between general partners (the syndicator) and limited partners, which allows investors to pool together their money and share risks as well as returns in acquiring, managing, and selling an apartment community. 

Asset Management Fee

A fee collected and earned by the general partner of an apartment syndication for overseeing the property.


Capital Expenditures (CapEx)

Money spent by a company to acquire, upgrade, and maintain a property, extending the useful life of a property. The expense is capitalized and spread out over the useful life of the asset. CapEx is not operating expenses, which are short-term expenses.  

Cash Flow

The amount of cash or profits remaining after paying all expenses. Income – All operating expenses = Cash Flow.

Cash-on-Cash Return (CoC)

A calculation used in apartment syndication to determine the rate of return based on the cash flow and equity investment. You Divide the cash flow by the initial equity investment. For example, (5,000/100,000) = .05 or 5% CoC.  


A loss in value of any asset over time.  Many real estate investors must utilize depreciation as a strategy to offset their taxable income. 

Distressed Property

An unstable apartment community where the occupancy rate is below 85% and typically has tenant problems, located in a bad location, or mismanaged with outdated interiors, exteriors or amenities, and/or deferred maintenance. 

Due Diligence

As it pertains to apartment syndications, the general partner will perform due diligence to confirm the property is not subject to any environmental or financial problems as well as confirming the underwriting assumptions and business plan. 

Equity Investment

The initial costs for purchasing a property. As it pertains to apartment syndications, these costs may include fees paid to the general partner, the down payment for the mortgage loan, closing costs, and financing fees. 

Equity Multiple (EM)

EM is the rate of return calculated by dividing the net profit and the equity investment by the total equity investment. 

Exit Strategy

The general partner’s plan or strategy for selling the apartment syndication at a certain time, as outlined in the business plan.

General Partner (GP)

In apartment syndications, the general partner is responsible for managing the entire apartment syndicate. Sometimes general partners are referred to as the sponsor or syndicator.  

Limited Partner (LP)

In apartment syndications, the LP is the passive investor who funds a portion of the equity investment, and has limited liability based on their share of ownership in the syndicate.

Net Operating Income

A commercial real estate lingo that refers to all the revenue from the property minus the operating expenses of the building.

Operating Agreement

A legal document used in an apartment syndication that outlines the responsibilities and ownership percentages for the general and limited partners. 

Operating Expenses

For apartment syndications, the costs of running and maintaining the property, the operating expense typically include payroll, utilities, maintenance, repairs, contract services, advertising/marketing, administrative, management fees, taxes, insurance, and reserves. 

Passive Investing

The act of placing one’s capital into an apartment syndication that is managed in its entirety by a general partner.

Preferred Return

Refers to the threshold return that limited partners are offered before the general partners can receive any payments.

Private Placement Memorandum (PPM)

A document/memo that outlines the investment terms and the primary risk factors involved in an apartment syndication or other investment. 


As it pertains to apartment syndication deal, pro forma will predict anticipated results for future years.

Profit And Loss Statement (T-12)

A spreadsheet containing detailed information about the revenue and expenses of a property over the last year. 


In an apartment syndication, when a general partner wants to change the position of the property in the market by adding value or rebranding.  

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