b'determining net asset value using comps and applying the IRV formula. Thisformulatakesintoaccountnetoperatingincomeoffund-owned properties along with market capitalization rates for similar properties to arrive at current estimated market value. Once you have an estimate of current market value, you can subtract the amount invested in each property to date, to determine how much appreciation early investors funds have appreciated. After determining the percentage appreciation in current properties, you can charge the same percentage as a premium for investors who come in later. They are effectively paying a higher price per interest than previous investorstoaccountfortheappreciation.Thepremiumpaidbylater investors gets distributed pro rata among earlier investors, who then feel they have been compensated for the appreciation their early investments generated, and so that later investors are now on par with earlier investors, when it comes to liquidating fund properties.Investment, Harvest and Liquidation Periods A blind pool fund typically has an investment period of 3-4 years, sometimes followed by a harvest period, which is then followed by a liquidation period. The total expected lifetime of a fund is usually 7-10 years. Properties acquired by the fund are typically held for 5-7 years before they are sold.The Life Cycle of a Real Estate Fund An illustration showing the life cycle of a real estate fund that acquires and owns multiple properties is provided below:123'