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.
An anchor tenant is a prominent, well-known commercial business that attracts significant customer traffic to a property, enhancing its value and stability for real estate investors.
Anchoring bias is a cognitive heuristic where an individual's decisions are overly influenced by an initial piece of information (the anchor), leading to skewed valuations, negotiations, and market analyses in real estate investment.
Annual Property Operating Data (APOD) is a detailed financial statement that summarizes a property's income and expenses over a 12-month period, culminating in its Net Operating Income (NOI). It is a critical tool for evaluating the profitability and investment potential of real estate.
Annuity is a financial contract from an insurance company providing a fixed or variable income stream over time, often used for retirement planning or structured settlements.
An Anti-Dilution Provision is a contractual clause, typically found in preferred stock agreements or limited partnership agreements, designed to protect early-stage investors from the dilution of their ownership percentage or investment value resulting from subsequent equity financing rounds at lower valuations.
Anti-dilution provisions are contractual clauses designed to protect investors' equity ownership percentage from being significantly reduced (diluted) by future equity issuances at a lower valuation, particularly in real estate syndications and private equity deals.
An appraisal contingency is a clause in a real estate purchase agreement that allows the buyer to back out of the deal or renegotiate if the property's appraised value is less than the agreed-upon purchase price. It protects buyers from overpaying and ensures lenders do not finance more than a property is worth.
Articles of Association (AoA) are a legal document outlining a company's internal management, governance, and the rights and responsibilities of its shareholders or members. They are crucial for structuring real estate investment entities.
An "As-Is Sale" in real estate refers to a property being sold in its current condition, meaning the seller will not make any repairs or improvements, and the buyer accepts all existing defects.
Asset allocation is an investment strategy that distributes capital across different asset classes, property types, and investment vehicles to manage risk and optimize returns according to an investor's financial goals and risk tolerance.
An asset bubble occurs when the price of an asset, such as real estate, rises rapidly and significantly above its intrinsic value, driven by speculative demand rather than fundamental economic factors, eventually leading to a sharp price decline.
Asset correlation is a statistical measure quantifying how two assets' returns move in relation to each other, ranging from -1 (perfect negative) to +1 (perfect positive), crucial for real estate portfolio diversification and risk management.
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