Different approaches to real estate investing including buy-and-hold, fix-and-flip, BRRRR, wholesaling, REITs, and syndications.
Master investment strategies & methods with our progressive approach
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.
Passive Activity Loss (PAL) rules limit the deduction of losses from passive activities, such as most rental real estate, against non-passive income like wages or portfolio earnings. These losses are typically suspended and carried forward until passive income is generated or the activity is disposed of.
Passive income refers to earnings from an enterprise in which an individual is not actively involved, typically generated from real estate investments like rental properties, REITs, or syndications, requiring minimal ongoing effort after initial setup.
Passive investing in real estate involves generating income or appreciation with minimal active management, often through vehicles like REITs, syndications, or turnkey properties, allowing investors to benefit from real estate without the day-to-day operational demands.
The Peak Phase is the highest point in a real estate market cycle, characterized by maximum property values, strong demand, and robust economic activity, just before a market downturn or correction.
Peer-to-Peer (P2P) lending connects individual investors directly with borrowers, often facilitated by online platforms, bypassing traditional financial institutions. In real estate, it provides alternative financing for projects and allows investors to fund loans for properties.
Performance measurement in real estate investing involves tracking and analyzing key financial metrics to evaluate how well an investment is performing against its goals and market benchmarks. It helps investors make informed decisions and optimize their strategies.
A compensation structure where a portion or all of a payment is contingent upon achieving specific, pre-defined performance metrics or outcomes, commonly used in real estate development, property management, and investment syndications to align interests.
Permanent financing is a long-term real estate loan, typically 5-30 years, used for stabilized properties or to replace short-term construction/bridge loans, characterized by amortization and predictable debt service.
A permanent rate buydown is a mortgage financing strategy where a borrower or seller pays an upfront fee, known as discount points, to reduce the interest rate on a loan for its entire term, resulting in lower monthly payments.
A legal process for individuals to eliminate or repay debts under federal law, significantly impacting credit, asset ownership, and future real estate investment capabilities.
Personal liability in real estate refers to an individual's direct responsibility for debts or legal obligations, allowing creditors or plaintiffs to pursue personal assets beyond those held by a business entity. It's a critical risk factor for investors.
Phantom equity is a compensation structure that grants employees or partners a financial stake in a company's future value appreciation without conferring actual ownership, voting rights, or direct equity. It mirrors the economic benefits of equity ownership, typically tied to specific performance metrics or exit events.
Explore complementary areas that build on investment strategies & methods concepts
Personal budgeting, expense tracking, cash flow management, emergency funds, and savings strategies.
Credit scores, debt consolidation, loan management, credit repair, and debt payoff strategies.
Macroeconomic concepts, interest rates, inflation, Federal Reserve policy, and economic cycles.
Wills, trusts, estate taxes, succession planning, beneficiary planning, and wealth preservation.