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Ali Ahmed
Real Estate Acquisitions
Safdar Alam
Director of Wahed Ventures
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Webinar
7th August 2025
Introduction to Wahed Real Estate:

Real Estate without Debt

An overview of fractional real estate investing with Wahed, focusing on our 0 debt, equity-based model. The session walked through the full investment journey from onboarding to property selection, with a live example of how to review deals in the app, followed by a Q&A.

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Glossary
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Equity-Based Model

An investment approach where investors buy shares in an SPV that directly owns the property, with no interest-bearing debt. Returns come from rental income (paid as dividends) and any capital appreciation at exit.

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Equity-Based Model

An investment structure in which investors purchase shares in a property-owning LLC. This model does not involve debt or interest-bearing instruments, aligning with Shariah principles by avoiding riba (interest).

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Escrow

A neutral third-party service that holds funds and documents until all the terms of a real estate transaction are met. Escrow ensures that money and property only exchange hands once both buyer and seller have met their contractual obligations.

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Escrow Agent

A licensed third party responsible for managing escrow accounts during real estate transactions. The agent ensures all closing documents, funds and signatures are properly handled before recording the deed.

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Exchange

The stage in a property purchase when buyer and seller sign and swap binding contracts and a deposit is paid. Completion follows on the agreed date when ownership transfers.

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Exit

The sale of the property and winding-up step for the SPV at the end of the holding period. Investors receive their share of the exit proceeds after costs.

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Exit

The point at which a property is sold and the net proceeds (after expenses and taxes) are distributed to investors based on their ownership percentage. Exit typically occurs at the end of the investment’s holding period.

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Exit Proceeds

The money available to distribute to shareholders after a sale, calculated as sale price minus selling costs and any remaining liabilities. Distributions are proportional to each investor’s shareholding.

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Expense Ratio

The percentage of total rental income spent on operating costs such as maintenance, insurance and property management. Example: if gross rent is $24,000 and expenses are $6,000, the expense ratio is 25%.

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Expense Ratio (Operating Expense Ratio)

Annual operating expenses divided by gross rent, shown as a percentage. Example: if gross rent is £24,000 and expenses are £6,000, the expense ratio is 25%.

Glossary
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FCA (Financial Conduct Authority)

The Financial Conduct Authority (FCA) regulates the financial services industry in the UK. Its role includes protecting consumers, keeping the industry stable and promoting healthy competition between financial service providers.

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Fair Market Value (FMV)

The price that a property would sell for on the open market between a willing buyer and seller, with both having reasonable knowledge of the property and neither being under pressure to act. Fair market value is typically determined through an independent appraisal.

Glossary
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Fee Simple Ownership

The highest form of property ownership in the US, where the owner holds complete rights to the land and any buildings indefinitely. The property can be sold, leased or transferred freely, subject only to zoning laws and taxes.

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Fees and Costs

The charges associated with sourcing, buying and running the property and the SPV. Typical items include acquisition costs, legal and conveyancing fees, platform or administration fees, property management, insurance, service charges and maintenance. Returns shown to investors are calculated after these costs.

Glossary
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FinCEN (Financial Crimes Enforcement Network)

A bureau of the US Department of the Treasury that enforces anti-money-laundering (AML) laws. FinCEN requires financial institutions and real estate investment platforms to verify investor identity, report suspicious activity and maintain compliance with AML regulations.

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Financial Year-End (FYE)

The 12-month accounting period used by a company to prepare its financial statements. For LLCs in fractional real estate, the financial year-end is typically December 31, aligning with the US tax reporting to the IRS.

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Fire Risk Assessment (FRA)

A review of fire hazards and safety measures for a building, required for most residential blocks. Findings can affect insurance, compliance work and operating budgets.

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Fractional Ownership

A model where many investors own a single property indirectly by buying shares in a special purpose vehicle (SPV) that holds the asset. Each investor’s shareholding sets their proportion of rental income and their share of any gain at sale. Example: if an SPV has 100,000 shares and an investor owns 1,500 shares, they hold 1.5% of the deal.

Glossary
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Fractional Ownership

A model where multiple investors collectively own a property through a Limited Liability Company (LLC). Each investor’s share determines their proportion of rental income, expenses and their share of any gain at sale. Example: if an LLC has 100,000 shares and an investor owns 1,500 shares, they hold 1.5% of the deal.

Glossary
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Freehold

A form of property ownership where the owner holds the land and the building outright, subject to planning and legal restrictions. In flats, the building is usually freehold while individual apartments are held on leasehold.

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Fully Funded

The point at which an investment round reaches its funding target and no further subscriptions are accepted. After being fully funded, the deal proceeds toward completion and share allotment.

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Funding Target

The total amount of money required to be raised in order to complete the purchase of the property. Example: a £480,000 house with £20,000 acquisition costs may have a £500,000 funding target.

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Funding Target

The total amount of money required to be raised in order to complete the purchase of the property. Example: a $480,000 house with $20,000 acquisition costs may have a $500,000 funding target.

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Fundraising Period

The period during which investors can commit capital to a property offering. In Regulation A offerings, this period is limited and ends once the target amount is reached or the offering deadline passes.

Glossary
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Furniture and Fixtures

The movable elements and fittings within a property, such as furniture, lighting and appliances. In rental properties, these may be owned by the landlord or included as part of the lease agreement.

Glossary
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Future Value (FV)

An estimate of what a property or investment could be worth at a future date, assuming projected appreciation or improvements. Future value is often used in return calculations to estimate potential total gains at exit.

Glossary
G

Governance

The rules and oversight that guide how an SPV is run, including directors’ responsibilities, shareholder voting, articles of association, reporting and Shariah oversight where applicable.

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Governance

The system of rules, processes and oversight that ensures the property-owning LLC operates transparently and in line with investor and regulatory expectations. Governance covers management duties, financial reporting and Shariah compliance.

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Grace Period (Rent)

A short period after the rent due date during which tenants can pay without incurring a late fee. Grace periods are typically defined in the lease agreement and vary by state law.

Glossary
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Gross Income

The total income a property generates before deducting expenses. This includes rental income, parking fees and other ancillary income sources. Gross income is used to calculate metrics like net operating income (NOI) and yield.

Glossary
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Gross Rent

Total rent received before any costs or fees. Gross rent is the starting point for calculating net income and yields. For example, if a property is rented for £2,000 per month, the annual gross rent is £24,000.

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Gross Rent

The total rent received from tenants before deducting any expenses. Gross rent is the starting point for calculating a property’s net income and yield. For example, if a property is rented for $2,000 per month, the annual gross rent is $24,000.

Glossary
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Gross Yield

Projected annual percentage return before deducting any expenses (e.g. management fees, maintenance). For example, if a property is priced at £350,000 and rented for £24,000 per year, the gross yield is 6.8% (24,000 ÷ 350,000).

Glossary
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Gross Yield

Projected annual percentage return before deducting any expenses (e.g. management fees, maintenance). For example, if a property is priced at $350,000 and rented for $24,000 per year, the gross yield is 6.8% (24,000 ÷ 350,000).

Glossary
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Gross-to-Net (Income)

The movement from gross rent to net income after deducting operating costs such as management fees, service charges, insurance, maintenance and voids. Understanding gross-to-net helps explain why net yield is lower than gross yield.

Glossary
G

Ground Lease

A long-term lease where a tenant or developer leases land from the owner and constructs or operates a building on it. When the lease ends, ownership of any improvements typically reverts to the landowner. Ground leases are less common in residential investing but may appear in commercial real estate.

Glossary
G

Ground Rent

A periodic payment due from a leaseholder to the freeholder under a long lease. For an SPV that owns a leasehold flat, ground rent is an operating cost and is separate from the service charge.

Glossary
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Growth Market

A geographic area or region where property prices and rental demand are increasing faster than the national average, often driven by job creation, population growth or infrastructure development.

Glossary
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Guarantor

A person who agrees to pay the rent or other tenancy liabilities if the tenant does not. Letting agents may require a guarantor to reduce arrears risk.

Glossary
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Guarantor

A person or entity that agrees to take responsibility for a tenant’s lease obligations if the tenant fails to pay rent or breaches the contract. Guarantors are often required for commercial or student housing leases.

Glossary
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Guide Price (Auctions)

An indicative price set by the auctioneer to guide bidders. It is not a formal valuation and the final sale price can be higher or lower.

Glossary
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HM Land Registry (HMLR)

The government register of property ownership and interests in England and Wales. Searches and registration with HMLR confirm the SPV’s legal title.

Glossary
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HMO (House in Multiple Occupation)

An HMO is a property rented out by at least 3 people who are not from 1 ‘household’ (for example a family) but share facilities like the bathroom and kitchen. It’s sometimes called a ‘house share’.

Glossary
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HMRC (tax authority)

His Majesty’s Revenue and Customs, the UK tax authority. It administers taxes relevant to property transactions and ownership, such as Stamp Duty Land Tax and corporation tax for SPVs.

Glossary
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HVAC (Heating, Ventilation and Air Conditioning)

A system that provides heating and cooling to maintain comfort in residential or commercial properties. Regular HVAC maintenance helps improve energy efficiency and reduce long-term repair costs.

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Halal Investing

Investing that follows Islamic principles by avoiding interest, excessive uncertainty and prohibited sectors. In our model, investors buy equity in an SPV that owns the property with zero debt.

Glossary
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Halal Investing

Investing that follows Islamic principles by avoiding interest, excessive uncertainty and prohibited sectors. In our model, all properties are acquired debt-free and structured through equity ownership to ensure full Shariah compliance.

Glossary
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Holding Costs

The ongoing costs of owning the property during the holding period, such as service charges, insurance, management, maintenance, ground rent and council tax during voids.

Glossary
H

Holding Costs

The ongoing expenses incurred while owning a property, including property taxes, insurance, utilities, HOA dues, maintenance and property management fees. These are deducted before distributing income to investors.

Glossary
H

Holding Deposit

A holding deposit, usually up to one week’s rent, reserves a property before the formal tenancy starts. It must be refunded or transferred to the tenancy deposit under conditions set by law.

Glossary
H

Holding Period

The planned length of time we intend to hold the property before aiming to sell and distribute proceeds. It sets how long investors should be prepared to stay invested and when an exit may be considered.

Glossary
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Holding Period

The planned length of time we intend to hold the property before aiming to sell and distribute proceeds. It sets how long investors should be prepared to stay invested and when an exit may be considered.

Glossary
H

Homeowners Association (HOA)

An organization that manages shared spaces and enforces community rules in certain residential developments. Homeowners pay monthly or annual dues to cover maintenance of amenities, landscaping and building insurance.

Glossary
H

House Price Index (UK HPI)

The official monthly measure of UK residential price changes. It uses actual registered sales (cash and mortgage) to publish average prices and monthly/annual change, often down to local authority level.

Glossary
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House Rules

Rules set by a property manager or HOA to maintain safety, cleanliness and harmony within a building or community. These typically cover noise levels, parking, waste disposal and guest policies.

Glossary
H

Housing Health and Safety Rating System (HHSRS)

A framework used by local authorities to assess housing hazards and require improvements where needed. It is relevant for landlord compliance and may influence refurbishment plans and budgeting.

Glossary
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Housing Market

The overall supply, demand and pricing conditions of residential properties in a given region. Factors like interest rates, employment, population growth and construction trends influence housing market performance and potential appreciation.

Glossary
H

Hybrid Model (Real Estate)

A structure combining elements of multiple investment approaches. For example, a blend of rental income (cash flow) and value appreciation (growth). In fractional real estate, hybrid models allow investors to benefit from both ongoing returns and long-term capital gains.

Glossary
I

IRS (Internal Revenue Service)

The US federal tax authority responsible for collecting taxes and enforcing tax laws. Investors in fractional real estate report income and gains to the IRS and may receive a Schedule K-1 for annual tax reporting.

Glossary
I

Ijarah (Lease)

An Islamic lease structure where one party (lessor) leases a tangible asset or property to another party (lessee) for an agreed period of time and at an agreed rental price.

Glossary
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Ijarah (Lease)

An Islamic lease structure where one party (lessor) leases a tangible asset or property to another party (lessee) for an agreed period of time and at an agreed rental price.

Glossary
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Illiquidity

The difficulty of converting an investment into cash quickly. Fractional property shares are typically held until exit, so investors should be prepared for a multi-year hold.

Glossary
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Illiquidity

The difficulty of converting an investment into cash quickly. Fractional real estate investments are typically illiquid and can only be exited when the underlying property is sold.

Glossary
I

Indemnity Insurance

An insurance policy taken out on completion to cover a specific legal risk (for example, missing building- regs sign-off). It protects the owner/SPV against losses from that defect.

Glossary
I

Independent Valuation

A valuation prepared by a qualified valuer to professional standards, used to assess fair market value for purchase or review.

Glossary
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Independent Valuation (Appraisal)

An unbiased assessment of a property’s fair market value conducted by a licensed appraiser. Independent valuations ensure transparency in the property’s pricing and support investor confidence in the acquisition process.

Glossary
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Inflation

The general increase in prices over time. Inflation can lift rents and nominal property values, but also increases costs such as maintenance and insurance.

Glossary
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Inflation

The general increase in prices over time. Inflation can lift rents and nominal property values, but also increases costs such as maintenance and insurance.

Glossary
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Inflation Hedge

An investment that tends to protect against inflation by maintaining or increasing in value as prices rise. Real estate is often considered an inflation hedge since property values and rents typically grow alongside broader economic inflation.

Glossary
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Infrastructure

The basic systems and facilities such as roads, transport links, utilities and public services that support a community. Strong infrastructure is a key factor in property valuation and long-term demand.

Glossary
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Initial Offering

The first opportunity for investors to buy shares in a property’s LLC through a regulated offering, such as under SEC Regulation A. Once the offering closes, no additional investors can join until the property is sold or a secondary market becomes available.

Glossary
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Inspection

A scheduled visit to check condition, safety and compliance during a tenancy, used to plan maintenance and protect rental income.

Glossary
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Insurance

A policy that protects against financial loss from risks such as fire, theft, liability or natural disasters. In real estate, insurance coverage is required for all properties and typically includes both building and liability protection.

Glossary
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Internal Rate of Return (IRR)

A measure of an investment’s overall performance that accounts for both the timing and amount of cash flows over the holding period. IRR reflects the annualized return achieved if all rental income and eventual sale proceeds are reinvested.

Glossary
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Inventory

A written and photographic record of a property’s condition and contents at the start and end of a tenancy. It helps resolve deposit deductions fairly.

Glossary
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Investment Committee (IC)

An internal group of experts that reviews each deal’s due-diligence (valuation, legal, cash flow) and approves or rejects a deal before it is listed for investment.

Glossary
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Investment Committee (IC)

An internal group of experts that reviews each deal’s due-diligence (valuation, legal, cash flow) and approves or rejects a deal before it is listed for investment.

Glossary
I

Investment Memorandum (IM)

A concise deal presentation for investors that summarises the property, structure, key metrics, sensitivity analysis, fees and costs and expected returns.

Glossary
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Investment Memorandum (IM)

A concise deal presentation for investors that summarizes the property, structure, key metrics, sensitivity analysis, fees and costs and expected returns.

Glossary
I

Investment Minimum

The smallest amount an investor can invest in a deal (for example, £500).

Glossary
I

Investor Agreement

A legally binding document that sets out the rights and obligations of investors in a property’s LLC, including profit distribution, reporting and voting rights.

Glossary
I

Islamic Finance

Islamic finance is a way of managing money and doing business while adhering to the moral principles of Islam.

Glossary
I

Islamic Finance

Islamic finance is a way of managing money and doing business while adhering to the moral principles of Islam.

Glossary
J

Joint Ownership

A form of property ownership where two or more parties hold title together. In the US, the two most common types are Joint Tenancy (where ownership passes automatically to the surviving owner) and Tenancy in Common (where each owner’s share can be passed to heirs).

Glossary
J

Joint Tenancy (Ownership)

A form of co-ownership where two or more people own the whole property together. If one owner dies, their share passes automatically to the other joint tenants.

Glossary
J

Joint Venture (JV)

A deal structure where two or more parties agree to co-invest in, develop, or manage a property project under agreed terms on roles, costs, and profit share. Some fractional deals may partner with a local developer via a JV at the SPV level.

Glossary
J

Joint Venture (JV)

A deal structure where two or more parties agree to co-invest in, develop, or manage a property project under agreed terms on roles, costs and profit share. In fractional real estate, a JV might involve a partnership between the investment platform and a developer to acquire or manage a property.

Glossary
J

Judgment Lien

A legal claim placed on a property by a court as security for an unpaid debt. Judgment liens must be resolved before the property can be sold or refinanced and are identified during the title review process before acquisition.

Glossary
J

Jurisdiction

The legal area whose laws apply to a matter. Most landlord-tenant and conveyancing terms in this glossary refer to England and Wales unless stated otherwise.

Glossary
J

Jurisdiction

The legal authority under which a property or company operates. In real estate, jurisdiction determines which state laws govern the transaction, ownership structure, taxes and dispute resolution.

Glossary
K

K-1 Form (Schedule K-1)

A tax form issued by Limited Liability Companies (LLCs) and partnerships to report each investor’s share of income, deductions and credits. Fractional real estate investors receive a Schedule K-1 each year to include their investment income on their individual tax return filed with the IRS.

Glossary
K

KPI (Key Performance Indicator)

A metric used to track deal performance, such as occupancy rate, rent collection rate, net yield, expense ratio or dividend yield.

Glossary
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KYC (Know Your Customer)

Identity and source-of-funds checks completed before you can invest. KYC helps confirm who you are and that investment money comes from lawful sources.

Glossary
K

Kafalah (Shariah-Compliant Guarantee)

A contract of guarantee where a guarantor (kafil) agrees to assume responsibility for an obligation if the primary party fails. It is conceptually similar to a tenancy guarantor.

Glossary
K

Kafalah (Shariah-Compliant Guarantee)

A contract of guarantee where a guarantor (kafil) agrees to assume responsibility for an obligation if the primary party fails. It is conceptually similar to a tenancy guarantor.

Glossary
K

Key Dates

The critical milestones for a deal, such as exchange, completion, rent start date and planned dividend or reporting dates.

Glossary
K

Key Performance Indicators (KPIs)

A metric used to track deal performance, such as occupancy rate, rent collection rate, net yield, expense ratio or dividend yield.

Glossary
K

Key Tenant

A tenant that occupies a significant portion of a property or provides long-term stability to rental income. In residential buildings, key tenants are often reliable, long-term renters who contribute to steady cash flow.

Glossary
K

Know Your Customer (KYC)

Identity and source-of-funds checks completed before you can invest. KYC helps confirm who you are and that investment money comes from lawful sources.

Glossary
L

Landlord

The person or organisation that owns the property that someone else pays rent to use. In our model the SPV is the landlord, and a managing agent handles day-to-day tasks.

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