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A separate legal entity (usually an LLC) created for a single real estate deal. It isolates risk — if the project has issues, the SPV's liabilities don't touch the parent company or other projects.

A passive investor who contributes capital but does not manage the deal. LPs receive their capital back first (preferred return) plus a share of profits, but have limited liability and no say in day-to-day operations.

The managing entity that sources, structures, and executes the deal. The GP handles acquisition, construction, asset management, and disposition. They typically co-invest alongside LPs and earn a promoted interest on profits.

The annualized rate of return that accounts for both the amount and timing of cash flows. Unlike a simple ROI, IRR rewards faster returns — a 40% gain in 6 months produces a higher IRR than the same 40% over 2 years.

Total cash returned divided by total cash invested. A 1.5x equity multiple means you got back $1.50 for every $1.00 invested. It tells you the total return but not how long it took (that's what IRR captures).

A minimum return to LPs that must be paid before the GP receives any profit share. For example, an 8% preferred return means LPs get an 8% annual return on their investment before the GP earns carried interest.

The order in which profits are distributed. A typical waterfall: (1) Return LP capital, (2) Pay LP preferred return, (3) GP catch-up, (4) Split remaining profits per the operating agreement (e.g., 70/30 LP/GP).

The estimated market value of a property after all renovations and improvements are completed. This is the number we underwrite against — the gap between purchase price and ARV is where the profit lives.

A permit status meaning the city has approved the plans and the building permit is ready to be issued upon payment. RTI permits drastically reduce construction timeline risk — you know exactly what you're allowed to build before you close.

A secondary housing unit on a single-family property. California's ADU laws allow builders to add significant value by constructing additional rental units on existing lots — a key strategy in MCH's value-add approach.

When one company controls multiple stages of the value chain. MCH owns the construction company, handles acquisition, permitting, renovation, and disposition — eliminating subcontractor markups and reducing project risk.

Hard costs are the physical construction expenses (materials, labor, equipment). Soft costs are the non-physical expenses (permits, architectural plans, inspections, insurance, legal fees). A typical project runs 70–80% hard costs and 20–30% soft costs.

An SEC exemption that allows companies to raise capital from accredited investors without registering a public offering. Rule 506(b) allows up to 35 non-accredited investors but prohibits advertising. Rule 506(c) allows advertising but all investors must be verified as accredited.

An individual with a net worth exceeding $1M (excluding primary residence) or annual income above $200K ($300K for couples) for the last two years. Also includes certain entities with $5M+ in assets. Required for most private real estate syndications.

The formal legal document that outlines all details of a private securities offering — including business plan, financial projections, risk factors, fee structure, and the operating agreement. LPs should read this in full before investing.

A tax-deferral strategy where proceeds from the sale of an investment property are reinvested into a like-kind property, deferring capital gains taxes. MCH structures certain dispositions to qualify for 1031 exchange treatment when it benefits investors.

The layers of financing used to fund a deal, ordered by risk and return. From bottom to top: senior debt (lowest risk, lowest return), mezzanine debt, preferred equity, common equity (highest risk, highest return). MCH's LP equity is 20% of the purchase price, with senior debt covering the remaining 80% of purchase plus all renovation costs.

When the GP invests their own capital alongside LPs. This aligns incentives — the sponsor has "skin in the game" and only profits when investors profit. MCH co-invests in every deal we sponsor.