Lock-up Period

A lock-up period is a stretch of time, starting when you buy, during which your shares cannot be sold, transferred or redeemed. Some lock-ups come from securities law. Some are set by the platform. Either way, your money is committed for the duration. It is different from the hold period. The hold period is how long the sponsor plans to own the property before selling it. The lock-up is how long you personally must keep your shares before any early exit is allowed. A deal might have a five-year hold and a one-year lock-up: after year one you may sell on a secondary market if there is one, and after year five the property is sold and everyone is paid out.

Regulation. Shares sold under Regulation D in the US are restricted securities and cannot be resold to the public for at least six months to a year. Regulation Crowdfunding shares are locked for one year except to the issuer or an accredited investor. Regulation A+ shares carry no statutory lock-up, which is one reason platforms that want a secondary market choose that route. Platform policy. Even without a legal restriction, platforms often impose their own initial hold to keep the shareholder register stable and discourage speculation. Arrived, for example, does not offer redemption until shares have been held for a set period. Practical illiquidity. When there is no secondary market at all, every day of the hold period is effectively a lock-up.

Read the lock-up before the yield. A 7% distribution is only useful if the money can stay put for as long as the lock-up and, realistically, the hold. Invest what you will not need in that window. Stagger. Buying into properties at different times means their lock-ups end at different times, which gives you some flexibility without depending on any single exit. On Threeworld a listing's platform page describes its resale rules, and the offering documents on the platform state the exact restriction. Check both before the first purchase on any platform.