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Intermediate1.5 hours15 terms

Discretionary Account Key Terms for REI

Explore this curated collection of key terms related to discretionary accounts in real estate investment. These carefully selected concepts provide clarity on how capital is managed and deployed, offering a helpful reference for investors navigating partnership structures and fund management. Understand the terminology you may encounter when dealing with investment discretion.

Term Collection

1

Risk Management

Risk management in real estate is the systematic process of identifying, assessing, and controlling potential threats to an investor's capital and returns, ensuring long-term asset protection and profitability.

Intermediate12-13 min
2

Asset Allocation

Asset allocation is an investment strategy that distributes capital across different asset classes, property types, and investment vehicles to manage risk and optimize returns according to an investor's financial goals and risk tolerance.

Intermediate5 min
3

Buy Box

A "Buy Box" is a set of specific criteria that real estate investors use to define the types of properties they are looking to acquire, helping them quickly identify suitable investment opportunities.

Beginner5 min
4

Carried Interest

Carried interest is a share of the profits of an investment fund, typically a private equity real estate fund or syndication, paid to the general partners (GPs) or managers after limited partners (LPs) have received their initial capital and a preferred return.

Advanced13 min
5

Discretionary Account

A discretionary account is an investment account where the account holder grants a financial advisor or broker the authority to make investment decisions, including buying and selling securities, without needing prior approval for each transaction.

Intermediate8-9 min
6

Client Agreement

A client agreement is a legally binding contract between a real estate investor or professional and their client, outlining the scope of services, responsibilities, fees, and terms of engagement.

Intermediate3 min
7

Limited Partnership

A business entity composed of at least one general partner (GP) who manages the business and assumes unlimited liability, and at least one limited partner (LP) who contributes capital but has limited liability and no management authority.

Intermediate14-18 min
8

Investment Policy Statement

An Investment Policy Statement (IPS) is a written document outlining an investor's investment objectives, risk tolerance, asset allocation strategy, and guidelines for managing their real estate portfolio.

Intermediate5-6 min
9

Investment Manager

An Investment Manager is a professional or firm responsible for managing a portfolio of real estate assets or funds on behalf of clients, aiming to achieve specific investment objectives and maximize returns.

Intermediate5 min
10

General Partner

A General Partner (GP) is the active manager in a real estate limited partnership or syndication, responsible for all operational and strategic decisions, and traditionally bearing unlimited personal liability for the partnership's obligations.

Intermediate12-15 min
11

Fiduciary Duty

Fiduciary duty is a legal and ethical obligation for a professional to act in the best interest of their client, prioritizing the client's needs above their own with utmost loyalty, care, and disclosure.

Intermediate14-17 min
12

Real Estate Fund

A real estate fund is a pooled investment vehicle that allows multiple investors to combine their capital to invest in a portfolio of real estate properties or real estate-related assets, managed by professional fund managers.

Intermediate6 min
13

Registered Investment Advisor

A Registered Investment Advisor (RIA) is a financial professional or firm that provides investment advice and manages portfolios for clients, operating under a strict fiduciary duty to act in the client's best interest at all times.

Intermediate5-6 min
14

Private Equity Real Estate

Private Equity Real Estate (PERE) involves institutional or high-net-worth investors pooling capital to acquire, develop, manage, and sell real estate assets, typically through a fund structure, with the goal of generating significant returns over a medium to long-term horizon.

Advanced8 min
15

Wealth Management

Wealth management is a comprehensive financial service that combines financial planning, investment portfolio management, and other aggregated financial services to manage the wealth of high-net-worth individuals and families.

Intermediate8 min

Common Questions