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.
Adjusted EBITDA is a financial metric that modifies a company's Earnings Before Interest, Taxes, Depreciation, and Amortization to exclude non-recurring, non-cash, or non-operating items, providing a clearer picture of core operational profitability, especially critical for real estate valuation and due diligence.
Adjusted Funds From Operations (AFFO) is a critical financial metric used primarily in real estate investment trusts (REITs) to measure the recurring cash flow available for distribution to shareholders, after accounting for non-cash items and recurring capital expenditures.
After Repair Value (ARV) is the estimated market value of a property after all planned renovations and improvements have been completed, crucial for assessing investment profitability.
Agricultural real estate refers to land and any associated structures primarily used for farming, ranching, timber production, or other agricultural purposes. It represents a unique investment opportunity focused on food production and natural resources.
Alignment of interests in real estate investing refers to the congruence of goals, incentives, and expectations among all parties involved in a transaction or partnership, ensuring everyone works towards a common, mutually beneficial outcome.
An all-cash offer in real estate is a proposal to purchase a property without requiring any financing, such as a mortgage. The buyer pays the entire purchase price directly from their available funds, leading to a faster and often simpler transaction.
Alpha measures the excess return of an investment or portfolio relative to the return of a benchmark index, adjusted for risk, indicating the value added by active management.
Alternative capital sources are non-traditional funding options for real estate investments, including private money, hard money, seller financing, and crowdfunding, offering flexibility and speed for deals that may not qualify for conventional bank loans.
An alternative investment is a financial asset that does not fall into conventional investment categories like stocks, bonds, or cash. For real estate investors, these often include assets like real estate itself, private equity, or commodities.
Alternative investments are financial assets outside of traditional stocks, bonds, and cash, including real estate, private equity, and commodities, often used for diversification and higher return potential.
Alternative lending encompasses non-traditional financing sources like hard money, private lenders, crowdfunding, and seller financing, offering speed and flexibility for real estate investments, often prioritizing asset value over borrower credit.
Analysis paralysis is the state where a real estate investor over-analyzes a potential deal, leading to inaction and missed opportunities due to excessive research and fear of making a mistake.
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