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Concepts

November 5, 2024

7 min read

Why a Distribution May Be Classified as Return of Capital (and Why That’s a Good Thing)

Have you ever received a distribution from a real estate fund or syndication...

Let’s start by clarifying the difference between cash flow and taxable income. In real estate funds, cash flow represents actual cash generated from sources like rental income or lending activities, but taxable income is often much lower than cash flow because of non-cash deductions—especially depreciation.

Depreciation is a valuable tax tool in real estate. It allows funds to deduct the “wear and tear” on assets from their taxable income without reducing actual cash flow. The result? Funds often have much more cash to distribute than taxable income to report.

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August 3, 2021

5 min read

Creating a Diversified Portfolio: Success Strategies

When it comes to investing, the notion of diversification is nothing new...

When it comes to investing, the notion of diversification is nothing new. Most investors know the wisdom behind not putting all their eggs in one basket. Yet, when it comes to real estate, this diversification often falls by the wayside. Many investors branch out into real estate, invest in a single asset, and believe they've achieved diversification. However, this approach misses the wealth of opportunity that real estate investment truly offers. Today, we'll discuss diversifying private equity real estate investments and why it's essential to your portfolio's overall success.

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