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.
Charges levied by online booking platforms on property owners (hosts) for listing and facilitating bookings of short-term rental properties, directly impacting profitability.
House hacking is a real estate investment strategy where you live in one unit of a multi-unit property or a portion of a single-family home, and rent out the remaining units or rooms to cover your housing expenses.
The Housing Affordability Crisis refers to a market condition where a significant portion of the population struggles to afford adequate housing due to high home prices, rising rents, and stagnant wages relative to housing costs. It impacts both homeowners and renters, creating barriers to entry for new buyers and financial strain for existing residents.
A housing market crash is a severe and rapid decline in real estate property values across a broad market, often triggered by economic downturns, excessive speculation, or unsustainable lending practices, leading to widespread financial distress.
Housing market risk refers to the potential for adverse changes in the value, demand, or liquidity of real estate assets, impacting investors' returns and capital. It encompasses various factors, from economic downturns to localized market shifts, that can undermine investment performance.
The Hub and Spoke Model is an advanced real estate investment strategy that centralizes high-value operations or assets (the 'hub') while decentralizing complementary, often smaller, assets (the 'spokes') to optimize efficiency, diversify risk, and enhance market reach across a portfolio.
IRA real estate investing involves using a self-directed Individual Retirement Account (SDIRA) to purchase and hold real estate assets, allowing investors to defer or avoid taxes on investment gains.
The If-Converted Method is an accounting technique used to calculate the dilutive impact of convertible securities on a company's earnings per share (EPS), assuming all such securities are converted into common stock at the beginning of the reporting period.
Illiquidity refers to the difficulty of converting an asset into cash quickly without significantly impacting its market price. Real estate is inherently illiquid due to high transaction costs, lengthy sales processes, and market dependencies.
The illiquidity premium is the additional return investors require for holding assets that cannot be easily converted to cash without significant loss in value, common in real estate due to its slow transaction process and high costs.
A non-cash payment for goods, services, or debt, often involving assets, property, or services instead of monetary exchange. It's common in real estate for partnerships, property exchanges, or compensation.
The Income Approach is a real estate valuation method that estimates a property's value based on the income it is expected to generate, making it essential for evaluating investment properties.
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