IronCrest Property Holdings — Glossary of Terms

Finding, financing, and operating properties directly using your own capital and time to execute the business plan.

Investing as a Limited Partner (LP) in a syndication run by a General Partner (GP). Earn distributions and share of profits without day‑to‑day responsibilities.

An owner of a partnership who has unlimited liability. The GP is responsible for managing the entire apartment project including finding the deal, negotiating the terms, securing the debt and equity, overseeing the renovation and management of the property and determine the ideal exit timing and strategy. The GP is also referred to as the sponsor or syndicator.

A partner whose liability is limited to the extent of the partner’s share of ownership. In apartment syndications, the LP is the passive investor and funds a portion of the equity investment. The LP then typically receives regular distributions from the project’s income and a share in the profits at the time of sale.

SEC designation typically requiring $200k individual income (or $300k joint) for the last two years with expectation to continue, or $1M+ net worth excluding primary residence. Certain FINRA licenses also qualify.

The hold period is the length of time an investor expects to own a property before selling it. In real estate syndications and private equity, the hold period is usually 3–10 years, depending on the strategy. Shorter hold periods (3–5 years) are often used for value-add or turnaround projects where the sponsor aims to renovate, stabilize, and exit quickly. Longer hold periods (7–10+ years) are more common for stabilized, cash-flowing assets focused on steady income and appreciation.

The hold period is important because it affects projected cash flow timing, IRR, and overall investor returns.

The Preferred Return is the threshold return that limited partners are offered prior to the general partners receiving payment. Displayed as a percent of the initial investment. For example, 7% preferred return – the investor receives an annual 7% return before the general partner receives a split of the profits.

The investor's / limited partner’s portion of the profits, which are sent on a monthly, quarterly or annual basis, plus potential proceeds at refinance and at sale, per the operating agreement or Private Placement Memorandum (PPM).

The Equity Multiple is a measure of an investment’s total return. It represents how much money an investor receives in relation to the amount of equity they originally invested. It is calculated as: Total Cash Returned (including Sale Proceeds) ÷ Total Cash Invested (e.g., 2.0× means $100k invested returns $200k over the life of the deal). Unlike IRR, it does not consider timing.

The Internal Rate of Return (IRR) is a measure of the annualized rate of return an investment is expected to generate over its lifetime. Unlike the Equity Multiple, IRR takes into account the time value of money—meaning it considers not only how much money you make, but also when you receive it. It is the discount rate that makes the present value of all future cash flows (distributions plus sale proceeds) equal to the amount of the initial investment.

Cash-on-Cash Return measures the annual return on the actual cash invested, factoring in the effect of financing. It directly reflects how financing structure (loan terms, leverage, interest rate) impacts investor returns.

Non‑cash expense that allocates a building’s cost over time (27.5 years residential, 39 years commercial), reducing taxable income.

A cost segregation study is a specialized tax analysis that identifies and reclassifies components of a real estate property into shorter depreciation schedules. Instead of depreciating the entire building evenly over 27.5 years (for residential) or 39 years (for commercial), a cost segregation study allows items like carpets, appliances, lighting, HVAC, parking lots, and landscaping to be depreciated over 5, 7, or 15 years.

Allows immediate expensing of qualifying short‑life assets identified in a cost segregation study. It is subject to phase‑down schedule under current law.

IRC §1031 mechanism to defer capital gains by selling an investment property and purchasing like‑kind real estate, following strict 45‑/180‑day timelines.

A document that outlines the terms of the investment and the primary risk factors involved with making the investment. More specifically, the document typically outlines the offering’s terms, risks, fees, and investor rights. Read carefully and consult your advisors. Often referred to as the Operating Agreement.

UBIT (Unrelated Business Income Tax) and UBTI (Unrelated Business Taxable Income) are IRS concepts that apply when a retirement account (like a Self-Directed IRA) earns income that is considered outside the scope of its tax-advantaged purpose. In real estate syndications, this usually comes into play when leverage (debt financing) is used. Consult your custodian and CPA.

Typically referred to as the "cap rate", it is the rate of return based on the income that the property is expected to generate. The cap rate is calculated by dividing the property’s net operating income (NOI) by the current market value or acquisition cost of a property (cap rate = NOI / Current market value). For example, a 216-unit apartment community with a NOI of $742,245 that was purchased for $12,200,000 has a cap rate of 6.1%.

Breakeven occupancy is the occupancy rate required to cover all of the expenses of an apartment community. The breakeven occupancy rate is calculated by dividing the sum of the operating expenses and debt service by the gross potential income.
For example, a 216-unit apartment community with $1,166,489 in operating expenses, $581,090 in debt service and $2,263,624 in gross potential income has a breakeven occupancy of 77.2%.

Financial evaluation of a property’s performance and risks to determine price, structure, and projected returns.

Property:
Class A: new construction, command highest rents in the area, high-end amenities
Class B: 10 – 15 years old, well maintained, little deferred maintenance
Class C: built within the last 30 years, shows age, some deferred maintenance
Class D: over 30 years old, low occupancy, a lot of deferred maintenance
Neighborhood:
Class A: most affluent neighborhood, expensive homes nearby
Class B: middle-class part of town, safe neighborhood
Class C: low-to-moderate income neighborhood
Class D: high crime, bad neighborhood

Retirement account that permits alternative assets (e.g., real estate). The account holds title; all income/expenses flow through the custodian. Special rules and prohibited transactions apply.

Recourse: lender may pursue borrower’s personal assets if collateral is insufficient. Non‑recourse: lender’s claim limited to collateral (subject to “bad‑boy” carve‑outs).

Agency debt refers to loans provided or guaranteed by U.S. government-sponsored enterprises (GSEs) such as Fannie Mae, Freddie Mac, or HUD. These agencies play a key role in financing multifamily real estate by offering attractive terms compared to traditional bank loans. Key features often include:
• Competitive interest rates (since they are government-backed)
• Longer amortization periods and flexible structures
• Non-recourse financing, meaning the borrower is not personally liable beyond the property itself

For example, when acquiring a multifamily property, a sponsor may secure a Fannie Mae loan instead of a traditional bank loan to lock in lower rates and more favorable terms