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.
Gross Potential Income (GPI) is the maximum possible revenue a rental property could generate if all units were fully occupied at market rent, including all other income sources, before accounting for expenses.
The Gross Rent Multiplier (GRM) is a real estate valuation metric that compares a property's purchase price to its gross annual rental income, used for quick initial screening of residential income properties.
A growth market in real estate refers to a geographic area experiencing significant and sustained increases in population, job opportunities, and property values, driven by strong economic and demographic trends.
A growth mindset in real estate investing is the belief that one's abilities, intelligence, and skills can be developed through dedication and hard work, leading to resilience, continuous learning, and adaptability in the face of market challenges and setbacks.
Guest communication involves all interactions between a property owner or manager and guests in a short-term rental, crucial for guest satisfaction and property profitability.
Guest experience refers to the overall impression and satisfaction a guest has during their stay at a rental property, influencing reviews, bookings, and profitability for investors.
The HELOC draw period is the initial phase of a Home Equity Line of Credit during which a borrower can access funds, make interest-only payments, and repeatedly borrow against their home equity up to a set credit limit.
Hard costs are the direct, tangible expenses associated with the physical construction or renovation of a real estate property, encompassing materials, labor, and equipment.
A hard money lender provides short-term, asset-based loans secured by real estate, primarily focusing on the property's value and the investor's exit strategy rather than traditional creditworthiness.
A hard money loan is a short-term, asset-backed real estate loan from private lenders, primarily based on the property's value rather than the borrower's credit, used for quick acquisitions or rehab projects.
Hedge effectiveness measures the degree to which a hedging instrument offsets changes in the fair value or cash flows of a hedged item, crucial for managing financial risks in real estate portfolios.
Hedging in real estate investing involves employing strategies or financial instruments to offset potential losses from adverse price movements, interest rate fluctuations, or other market risks, thereby protecting an investment's value or cash flow.
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