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Glossary for Investors

Underwriting

Underwriting

Underwriting is the process by which an underwriter performs due diligence on and otherwise scrutinizes a financing request made by a Sponsor seeking funding for a real estate project to determine how much risk to accept.

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Target average cash yield is calculated by taking the average of a property's projected annual net cash flows, and dividing by the initial equity investment amount.

A “more diversified” portfolio refers to the practice of investing in a wide(r) variety of assets, most commonly in comparison to a traditional portfolio consisting entirely of publicly traded assets.

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