A preferred return is the claim on profits given to preferred investors in a project. The preferred investors will be the first to receive returns up to a certain percentage, generally between 6% to 8%.

A sophisticated investor is someone who has sufficient income ($100K+), capital, experience, education within the investment class, and net worth ($350K+) to engage in more advanced investment opportunities.

To be an accredited investor, you must EITHER have a net worth of $1M+ (not counting your primary home) OR have an annual income of $200K+ as an individual ($300K+ for joint income) over the last 2 years.

In general, a “good” cash-on-cash (COC) return in multifamily real estate will be in range between 7-12%. However, although COC return may be considered good, multiple factors need to be analyzed alongside it.

In general, if you can purchase a multifamily property at a 4%-6% cap, it can provide with tons of room to upside cashflow potential and better ROI (return on investment).

Bonus depreciation is a tax incentive that allows a business to immediately deduct a large percentage of the purchase price of eligible assets, such as machinery, rather than write them off over the lifecycle of that asset.

An offering memorandum is a legal document that states the objectives, risks, and terms of an investment involved with a private placement. This document includes items such as a company’s financial statements, management biographies, a detailed description of the business operations, and more.

An offering memorandum serves to provide buyers with information on the offering and to protect the sellers from the liability associated with selling unregistered securities.

A Private Placement is a sale of shares or “interest” to pre-selected investors and institutions rather than on the open market. It is an alternative to an initial public offering (IPO) for a company seeking to raise capital for expansion. A private placement allows us to legally offer investment shares in a real estate syndication through SEC exemption 506(b) or 506(c).

A Private Placement Memorandum (PPM) is an investment document or offering description that lays out the details, structure, risk, projected returns, and business strategy of how the sponsor will operate the investment.