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.
The Installment Method is a tax deferral strategy allowing sellers of real estate to spread the recognition of capital gains over the period in which payments are received, rather than recognizing the entire gain in the year of sale.
An installment sale is a transaction where a seller finances the buyer's purchase of property, receiving at least one payment after the tax year of the sale, thereby deferring capital gains taxes over time.
An institutional investor is a large organization, such as a pension fund, mutual fund, insurance company, or endowment, that pools money to invest in various assets, including real estate.
Institutional-grade assets are high-quality, large-scale real estate properties that attract significant investment from institutional investors like pension funds, endowments, and sovereign wealth funds due to their stable income, low risk, and strong market positions.
Interest rate risk is the potential for investment losses or reduced returns due to adverse changes in market interest rates, significantly impacting real estate valuations, financing costs, and cash flow projections.
An interest-only loan is a debt where the borrower pays only the interest on the principal balance for a set period, with no principal reduction during that time. This results in lower initial monthly payments.
The Internal Rate of Return (IRR) is a sophisticated financial metric used in capital budgeting to estimate the profitability of potential investments, representing the discount rate at which the net present value (NPV) of all cash flows from a particular project equals zero.
The Internet of Things (IoT) in real estate involves embedding smart sensors and devices within properties to collect and exchange data, enabling remote control, automation, and data-driven insights for optimized property management and enhanced investment returns.
Inventory turnover measures how quickly a company sells its inventory and replaces it. In real estate, it is a critical metric for developers and fix-and-flip investors to assess how efficiently they convert properties into sales, directly impacting liquidity and profitability.
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.
Investment capacity is an investor's total ability to acquire and manage new real estate assets, considering financial resources, debt access, risk tolerance, and operational capabilities. It dictates the scale and pace of portfolio expansion.
A systematic list of criteria and steps investors use to evaluate potential real estate properties, ensuring thorough due diligence and alignment with investment goals.
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