Key Terms in Private Real Estate & Impact Housing

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This glossary is provided for educational and informational purposes only to help readers understand commonly used terms related to private real estate, governance structures, and mission-aligned housing.

Definitions are general in nature and may not reflect the specific terms of any investment, legal agreement, or offering.
Nothing on this page constitutes investment advice or an offer to sell securities.

An individual or entity that meets specific financial or professional criteria established by the U.S. Securities and Exchange Commission (SEC), which may permit participation in certain private securities offerings that are not registered for public sale.

An individual may qualify as an accredited investor if they meet one or more of the following conditions:

• Income Test:
  • Earned income exceeding $200,000 in each of the two most recent years (or $300,000 jointly with a spouse or spousal equivalent), with a reasonable expectation of maintaining the same income level.
     
• Net Worth Test:
  • Net worth exceeding $1 million, either individually or jointly with a spouse or spousal equivalent, excluding the value of a primary residence.
     
• Professional Certification Test:
  • Holds certain professional certifications, designations, or credentials recognized by the SEC (such as specific financial licenses), subject to applicable rules.
     

Certain entities may also qualify as accredited investors, including but not limited to:

• Trusts, partnerships, or limited liability companies meeting asset or ownership requirements
   
• Entities in which all equity owners are accredited investors
   
• Institutional or professional entities as defined by SEC regulations
   

Eligibility depends on structure, ownership, and applicable laws.

In offerings conducted under certain exemptions, investor status may be subject to independent verification. This process can involve third-party review of financial or professional information, conducted in accordance with applicable regulations.

Accredited investor status does not imply suitability, nor does it eliminate investment risk.
Private investments may involve limited liquidity, regulatory restrictions, and potential loss of principal.

This definition is provided for educational purposes only and does not constitute legal or investment advice.

A real estate structure in which value is supported by tangible property assets, such as residential or commercial buildings, rather than solely by financial instruments or contractual claims.

The combination and hierarchy of capital sources used to finance a real estate asset or portfolio. This may include equity, preferred equity, and debt, each with different rights and risk profiles.

Substance-free residential housing that meets established safety, quality, and governance standards set by recognized certifying bodies. In Massachusetts, this commonly includes certification through MASH.

The party responsible for managing and overseeing a real estate or investment entity, including strategic decisions, compliance, and administration, as defined by governing documents.

An entity or individual that shares certain management, oversight, or economic responsibilities with the General Partner, as outlined in governing agreements.

A participant in a private real estate or investment structure who does not participate in day-to-day management or operational decision-making. The rights, responsibilities, and economic participation of a Limited Partner are defined by formal governing documents, such as an operating agreement or limited partnership agreement.

In properly structured limited partnerships or limited liability entities:

• Limited Partners are generally not personally liable for the debts or obligations of the entity beyond their capital contribution, provided they do not take part in management or control.
   
• A Limited Partner’s financial risk is typically limited to the amount of capital invested, subject to the terms of the governing documents and applicable law.
   
• Limited Partners do not guarantee loans, contracts, or operational liabilities unless they separately agree to do so.
   

Liability protection depends on:

• The legal structure of the entity
• Compliance with governing documents
• Applicable state and federal laws
   

Limited liability status does not eliminate investment risk.
Limited Partners may still experience a partial or total loss of their invested capital, and protections do not apply to actions taken outside the scope of the partnership or in violation of governing agreements.

This definition is provided for educational purposes only and does not constitute legal advice.

The policies, agreements, and oversight mechanisms that define how decisions are made, responsibilities are assigned, and accountability is maintained within an organization or platform.

A financial metric commonly used to estimate the annualized return of an investment over time. IRR calculations rely on assumptions and projections and are not guarantees of performance.

The risk that an investment may not be readily sold or converted to cash at a desired time. In private real estate and similar investments, the ability to sell or transfer an interest may be limited and can depend on factors such as:

• The nature of the investment structure
   
• Applicable legal or contractual restrictions
   
• Real estate market conditions
   
• Investor demand at the time of sale
   

As a result, an investment may need to be held for a longer period than anticipated, and any sale or transfer may occur at a price that differs from the original investment amount.

Liquidity risk relates to timing and market conditions, not guarantees of outcome.
The value of real estate–related investments may fluctuate over time, and there is no assurance that an investment can be sold quickly or at a particular price.

Certification provided by the Massachusetts Alliance for Sober Housing, establishing standards for safety, ethics, governance, and resident protection in recovery housing.

A legal document that defines the structure, governance, rights, and responsibilities of parties within a limited liability company or similar entity.

A legal document through which an investor formally applies to participate in a private investment offering. The subscription agreement outlines the terms under which an investor agrees to purchase an interest in an investment entity and confirms that the investor meets applicable eligibility and qualification requirements.

A subscription agreement commonly addresses:

• The amount of capital the investor agrees to contribute
• Representations and acknowledgments made by the investor (such as eligibility or accreditation status)
• Acceptance of the terms outlined in the governing documents
• Disclosures regarding risks, transfer restrictions, and compliance requirements
   

The agreement becomes effective only upon acceptance by the issuing entity, as specified in the offering documents.

An organization responsible for the daily management of a recovery residence, including resident oversight, compliance with standards, and community engagement.

A contractual feature that may provide certain investors priority distributions before others, subject to the terms set forth in governing documents.

A confidential disclosure document used in private securities offerings that outlines risks, structure, and terms of an investment opportunity.

A U.S. securities regulation that allows certain private offerings to be conducted without public registration, subject to defined conditions and investor qualifications.

A U.S. securities regulation governing securities offerings made outside the United States to non-U.S. persons.

A method used in private real estate and similar investment structures to describe how cash flows or distributions are allocated among participants in a predetermined sequence, as defined in the governing agreements.

In a typical waterfall structure:

• Distributions are made according to a set order of priority, rather than all participants receiving funds at the same time or in the same proportion.
   
• The sequence and conditions for distributions are established in advance and documented in governing agreements such as operating agreements or partnership agreements.
   
• Different participant roles may be entitled to distributions at different stages, depending on the agreed structure.
   

Waterfall structures are commonly used to align incentives, define economic relationships, and clarify how funds are allocated under various scenarios.

• A waterfall structure does not guarantee that distributions will occur.
   
• Actual distributions depend on factors such as asset performance, expenses, market conditions, and contractual obligations.
   
• The specific terms, priorities, and thresholds vary by structure and are governed solely by the applicable legal agreements.
   

This definition is provided for educational purposes only and does not describe any specific investment opportunity.

This glossary is educational only and does not describe any specific investment opportunity.
Actual definitions, rights, and obligations may vary by entity, agreement, and jurisdiction.

Any investment-related information, if applicable, is provided only through separate platforms and only after appropriate qualification.