Understanding returns in the context of real estate investing is no different from understanding returns in the context of any other investment.  The difference is: the returns are “pre-crunched” in a privately-offered real estate investment.  Because you are investing in a thoroughly-vetted and underwritten real estate project, an experienced sponsor is able to provide finite expectations regarding the cash returned to the investor during the project.  An investor should have some idea of the basic terminology underlying investment returns to understand how and when profits will be realized.