In commercial multifamily real estate, there’s a language that is spoken when you are connecting with brokers, property managers and other investors in the profession. To avoid sounding like a novice, an investor must be fluent with the real estate terminology to be taken seriously. Let’s take a minute to breakdown one of those terms.
The operating account funding is a reserve fund kept over the price of the property, for emergency cases to cover uncertainties like unexpected drops in occupancy, lump sum insurance payments or comparatively higher capital expenditures. The operating account fund is usually created by pulling extra money from the limited partners.
By learning these concepts and terms, you’re separating yourself from the novice investor looking to be more active than passive. Here’s where you can learn more multifamily investing terms.