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.
Out-of-state lending refers to securing financing for a real estate investment property located in a different state than the borrower's primary residence or the lender's main operational base. It enables investors to expand their portfolios beyond local markets.
Outsourcing in real estate involves delegating specific tasks or functions to external third-party providers to improve efficiency, reduce costs, and allow investors to focus on core investment strategies.
Overbuilding occurs when the supply of new real estate units in a market significantly exceeds the current and projected demand, leading to increased vacancies, downward pressure on rents and property values, and reduced investment returns.
A cognitive bias where an individual's subjective confidence in their judgments is reliably greater than the objective accuracy of those judgments, leading to underestimation of risks and overestimation of returns in real estate investing.
Overleveraging occurs when an investor uses an excessive amount of borrowed capital to finance a real estate investment, significantly increasing financial risk and vulnerability to market downturns or unexpected expenses.
An owner-occupied multi-unit property is a residential building with two to four units where the owner lives in one unit and rents out the others, leveraging rental income to offset mortgage payments and build equity.
An owner-occupied property is real estate where the owner lives as their primary residence, often qualifying for favorable financing, lower down payments, and significant tax benefits.
The owner-operator model in real estate investing involves an investor directly managing their own investment properties, handling all aspects from tenant relations to maintenance, rather than outsourcing these tasks to a third-party property management company.
Panic selling occurs when investors rapidly sell off assets, often at a loss, due to fear, negative news, or market uncertainty, leading to sharp price declines and exacerbating market downturns.
Paper losses, also known as unrealized losses, represent a decrease in the market value of an asset below its purchase price, but the asset has not yet been sold. These losses exist only on paper until the asset is actually sold.
A partial release is a clause in a mortgage or deed of trust that allows a borrower to obtain a release of a portion of the collateral from the lien, typically upon payment of a specified amount.
A Partnership Agreement is a legally binding contract outlining the terms and conditions between two or more parties who agree to pool resources and share profits or losses in a real estate investment venture. It defines roles, responsibilities, capital contributions, and decision-making processes.
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