This glossary covers terms specific to real estate crowdfunding investment.
Platform & Structure
Crowdfunding Platform
Online service connecting investors with real estate investment opportunities.
SPV (Special Purpose Vehicle)
Legal entity created to hold a specific property, with investors as shareholders.
Syndication
Pooling investor capital for a real estate investment.
Sponsor/Operator
The company managing the investment on behalf of investors.
Investment Terms
Minimum Investment
Smallest amount a platform accepts for a single investment.
Accredited Investor
Investor meeting financial criteria for access to certain investments.
Subscription Agreement
Legal document signed when committing capital to an investment.
Capital Call
Request for investors to contribute committed capital.
Returns & Distribution
Preferred Return
Minimum return investors receive before profit sharing.
Waterfall
Structured sequence for distributing returns: capital return, preferred return, profit split.
Carried Interest (Carry)
Operator's share of profits above preferred return.
Distribution
Payment of returns to investors.
IRR (Internal Rate of Return)
Annualized return accounting for timing of cash flows.
Timeline & Liquidity
Lock-Up Period
Time during which capital cannot be withdrawn.
Hold Period
Expected duration of the investment.
Exit
Sale of property and distribution of proceeds to investors.
Secondary Market
Marketplace for selling investment positions before exit.
Risk & Protection
Due Diligence
Investigation before committing capital.
Diversification
Spreading investments across multiple opportunities.
Capital Protection
Strategies to preserve invested principal.
Understanding crowdfunding terminology enables confident participation in these investments.
