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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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July 6, 2021

4 min read

Property, Asset, and Portfolio Management in Real Estate

In real estate, particularly within private equity, there are three...

In real estate, particularly within private equity, there are three crucial management layers that investors need to understand: property management, asset management, and portfolio management. Each layer has its unique roles, objectives, and functions, which this post aims to clarify.

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