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.
Preferred equity is a hybrid financing instrument in real estate that provides investors with a preferential claim on a property's cash flow and sale proceeds, typically paid before common equity but after senior debt.
Preferred Return is a priority distribution threshold in real estate syndications, ensuring limited partners receive a specified annual return on their unreturned capital before general partners share in profits.
Preferred stock is a hybrid security that combines features of both bonds and common stock, typically offering fixed dividend payments and priority over common stockholders in receiving dividends and assets upon liquidation.
Premium financing is a sophisticated financial strategy where an investor borrows funds from a third-party lender to pay the premiums on a large insurance policy, typically a life insurance policy or substantial commercial property insurance, using the policy itself or other assets as collateral.
Price averaging is an investment strategy where an investor acquires assets at different price points over time, aiming to reduce the overall average cost per unit and mitigate risk from market volatility.
Price discovery is the dynamic process by which the market determines the fair value of a real estate asset through the interaction of buyers, sellers, and available information.
A pricing strategy in real estate is a systematic approach used by investors and sellers to determine the optimal listing price for a property, balancing market conditions, property characteristics, and investment goals to maximize returns or achieve a quick sale.
The Prime Rate is the interest rate that commercial banks charge their most creditworthy corporate customers, serving as a benchmark for many variable-rate loans and heavily influenced by the Federal Funds Rate.
Principal paydown is the portion of your mortgage payment that reduces the outstanding loan balance, directly building equity in your real estate investment over time.
Private Equity Real Estate (PERE) involves institutional or high-net-worth investors pooling capital to acquire, develop, manage, and sell real estate assets, typically through a fund structure, with the goal of generating significant returns over a medium to long-term horizon.
A Private Equity Real Estate (PERE) fund is an investment vehicle that pools capital from institutional and accredited investors to acquire, develop, manage, and sell real estate assets, aiming for significant returns over a defined investment horizon.
A private lender is an individual or entity that provides capital for real estate investments outside of traditional financial institutions, offering flexible terms and faster funding for unique or time-sensitive deals.
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