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.
Asset location is an investment strategy that focuses on placing different types of assets into specific account types (taxable, tax-deferred, or tax-exempt) to maximize after-tax returns and optimize tax efficiency.
A recurring fee paid to the general partner or sponsor of a real estate investment for strategic oversight and management of the underlying assets, aimed at maximizing overall investment value.
Asset protection involves legal strategies and structures designed to safeguard an individual's or entity's wealth from potential claims by creditors, lawsuits, and other liabilities, particularly crucial for real estate investors.
Asset segregation is a legal and financial strategy for real estate investors to separate personal assets from investment assets, or to segregate different investment properties from each other, primarily for liability protection and risk management.
The Asset Turnover Ratio measures how efficiently a company or investment property uses its assets to generate sales revenue. It indicates how many dollars in sales are generated for each dollar of assets.
Assumptions in real estate investing are educated guesses about future variables, such as rent growth, expenses, and market appreciation, used to build financial models and project investment performance.
The BRRRR Method is an advanced real estate investment strategy (Buy, Rehab, Rent, Refinance, Repeat) designed to build a scalable rental property portfolio by leveraging forced appreciation to recycle initial capital for subsequent investments.
A quick, informal estimation used by real estate investors to rapidly assess the potential profitability of an investment opportunity without detailed analysis. It helps determine if a deal is worth further investigation.
Back-of-the-Napkin Math involves quick, informal calculations to rapidly assess the initial financial viability of a real estate investment, helping investors efficiently screen properties before committing to detailed analysis.
A balloon payment is a large, lump-sum payment of the remaining principal balance that becomes due at the end of a loan term, typically after a period of smaller, partially amortized or interest-only payments.
A Bank Statement Loan is a non-qualified mortgage (Non-QM) product designed for self-employed individuals and real estate investors who cannot easily document their income through traditional tax returns, instead relying on 12-24 months of business or personal bank statements for income verification.
A bare trust is a simple trust arrangement where the trustee holds legal title to an asset, but the beneficiary has absolute entitlement to both the asset and any income it generates, retaining full control over the asset's management and disposition.
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