Different approaches to real estate investing including buy-and-hold, fix-and-flip, BRRRR, wholesaling, REITs, and syndications.
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Foundation terms you need to know first (108 terms)
Real estate networking is the strategic process of building relationships with other professionals and investors in the real estate industry to share knowledge, find opportunities, and secure resources for investment success.
An office building is a commercial property designed for businesses to conduct administrative, professional, or commercial operations, offering spaces for work and meetings.
A traditional bank mortgage is a conventional loan provided by a financial institution to purchase real estate, following guidelines from Fannie Mae and Freddie Mac, commonly used by investors to finance properties.
A retail center is a commercial property designed for various retail businesses, ranging from small strip malls to large shopping centers, providing goods and services to consumers.
A professional network in real estate investing is a group of contacts, including other investors, agents, lenders, and contractors, who provide support, resources, and opportunities.
Complex strategies and professional concepts (57 terms)
Subject-To investing is an advanced real estate strategy where an investor acquires a property by taking over payments on the seller's existing mortgage, without formally assuming the loan or notifying the lender.
A Self-Directed IRA (SDIRA) is a specialized retirement account allowing investors to hold alternative assets like real estate, private equity, and precious metals, offering enhanced control but requiring strict adherence to complex IRS regulations to avoid prohibited transactions and Unrelated Business Income Tax (UBIT).
A senior lien is a legal claim on a property that holds the highest priority for repayment in the event of a foreclosure or liquidation, ensuring its holder is paid before any other creditors.
Boot in a 1031 Exchange refers to any non-like-kind property, such as cash or debt relief, received by an investor that triggers immediate taxation on the lesser of the realized gain or the fair market value of the boot received, thereby partially negating the tax-deferred benefits of the exchange.
Return on Cost (ROC) is a real estate metric that measures the projected Net Operating Income (NOI) of a stabilized property against its total development or value-add cost, providing a forward-looking assessment of profitability for new projects.
The 1% Rule is a real estate investing guideline stating that a rental property's gross monthly rent should be at least 1% of its purchase price, used for quick initial screening of potential investments.
A 1031 Exchange allows real estate investors to defer capital gains and depreciation recapture taxes when selling an investment property by reinvesting the proceeds into a new "like-kind" investment property within strict IRS timelines.
A 401(k) loan allows participants to borrow a portion of their vested retirement savings, repaying the principal and interest back into their own account, often used by real estate investors for short-term capital needs like down payments or rehabilitation.
The 5-Hour Real Estate Week is a strategic framework for real estate investors focused on maximizing portfolio returns and growth while minimizing active time commitment through automation, delegation, and optimized systems.
An absentee owner is an individual or entity that owns real estate but does not reside in or personally manage the property, typically living in a different geographic location.
The absorption rate measures the pace at which available properties are sold or leased in a specific market over a given period, indicating the balance between supply and demand.
An Abundance Mindset in real estate investing is a psychological framework where an investor believes there are always enough resources, opportunities, and success for everyone, fostering collaboration and value creation.
Acceptance in real estate is the unconditional agreement by a buyer or seller to the exact terms of an offer, forming a legally binding contract for a property transaction.
An Accessory Dwelling Unit (ADU) is a secondary housing unit on a single-family residential lot, offering independent living facilities for one or more persons, often used by investors to generate additional rental income or increase property value.
An Accredited Investor is an individual or entity meeting specific SEC-defined financial thresholds or professional qualifications, enabling them to invest in private, unregistered securities and exclusive opportunities.
An acquisition fee is an upfront charge in real estate syndications or funds, compensating the sponsor for identifying, evaluating, negotiating, and closing a property deal. It's typically a percentage of the purchase price or equity raised, impacting initial capital and overall investment returns.
Actionable steps are small, specific, and measurable tasks that break down a larger real estate investment goal into manageable parts, making it easier to plan and execute your strategy.
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