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 (153 terms)
Equity investment in real estate involves directly owning a portion or all of a property, providing the investor with an ownership stake and the potential to benefit from appreciation and rental income.
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 absolute auction is a type of real estate auction where the property is sold to the highest bidder, regardless of the price, with no minimum bid or reserve price set by the seller.
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.
Complex strategies and professional concepts (156 terms)
Slow BRRRR is an advanced real estate investment strategy that extends the traditional BRRRR (Buy, Rehab, Rent, Refinance, Repeat) cycle over a longer period, often several years, to maximize equity appreciation and mitigate market risks.
An Equity-for-Property Swap is an advanced real estate investment strategy where an investor exchanges equity in one or more properties or entities for direct ownership of another property, often to achieve tax deferral, portfolio restructuring, or strategic asset acquisition.
Equity dilution occurs when a company or investment vehicle issues new shares, decreasing the ownership percentage of existing shareholders. In real estate, this often happens in syndications or partnerships when additional capital is raised.
Inverse condemnation is a legal action initiated by a private property owner against a government entity to recover "just compensation" for a taking of their property, where the government has not formally exercised its power of eminent domain but has effectively deprived the owner of beneficial use or value.
Capital stacking is an advanced real estate financing strategy involving the layering of multiple debt and equity instruments to fund a property acquisition or development, optimizing the capital structure for specific risk-return profiles.
Cash-on-Cash Return (CoC) is a real estate investment metric that calculates the annual pre-tax cash flow generated by a property as a percentage of the total cash an investor has invested.
A change order is a formal amendment to a construction contract that modifies the original scope of work, cost, or schedule of a real estate development or renovation project.
Channel stuffing is a deceptive business practice where a company inflates its sales figures by inducing customers, often distributors or related parties, to buy more products or services than they can realistically sell or utilize, typically through aggressive incentives or unsustainable terms, to meet short-term financial targets.
A legal remedy obtained by a creditor to seize a debtor's interest in a partnership or LLC, allowing the creditor to receive distributions without becoming a member or partner.
A Charitable Remainder Trust (CRT) is an irrevocable trust that provides an income stream to the grantor or other non-charitable beneficiaries for a specified term, with the remaining assets distributed to a qualified charity upon the trust's termination.
Checkbook control grants the administrator of a self-directed retirement account, typically an IRA or 401(k), direct authority to manage and invest funds by writing checks or initiating electronic transfers from a dedicated LLC, bypassing traditional custodian approvals for each transaction.
Class A buildings represent the highest quality and most desirable properties in the commercial real estate market, characterized by prime locations, modern amenities, superior construction, and professional management.
A Class B building is a commercial or multifamily property that is typically older but well-maintained, offering functional amenities and a balance between quality and affordability, often targeted for value-add investment strategies.
Class C buildings are older, typically 20+ years, in less desirable locations, often requiring significant renovation, but offer high cash flow potential and value-add opportunities for investors.
Co-hosting in real estate refers to a partnership where a property owner collaborates with an experienced individual or company to manage their short-term rental property, sharing responsibilities and often a percentage of the rental income.
A Co-ownership Agreement is a legally binding contract outlining the rights, responsibilities, and obligations of multiple parties who jointly own a single real estate property.
Cognitive biases are systematic deviations from rational judgment, inherent mental shortcuts that can lead to irrational decisions in real estate investment, impacting valuations, market perceptions, and portfolio performance.
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