Definition
The order in which cash distributions are allocated among partners in an investment structure.
Example
The waterfall paid an 8% preferred return before splitting remaining profits 70/30.
Related terms
Frequently asked questions
What does Waterfall mean in real estate?
The order in which cash distributions are allocated among partners in an investment structure.
How is Waterfall used in practice?
The waterfall paid an 8% preferred return before splitting remaining profits 70/30.
This definition is provided for educational purposes. Legal and tax terminology can carry jurisdiction-specific meaning — confirm with a licensed professional before relying on it in a transaction.