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.
Private lending involves individuals or non-institutional entities providing real estate loans, typically secured by property, characterized by flexible terms, faster funding, and higher interest rates than traditional banks.
Private lending with life insurance policy loans involves borrowing against the cash value of a permanent life insurance policy to fund real estate investments, offering a flexible and often tax-advantaged financing method.
A private money loan is a non-bank loan provided by individuals or private companies, secured by real estate, offering flexible terms and fast funding for real estate investors.
A Private Placement Memorandum (PPM) is a legal document provided to prospective investors in a private securities offering, detailing the investment opportunity, management, terms, and all associated risks to ensure compliance with securities laws and facilitate informed decision-making.
A Private REIT is a real estate investment trust that is not publicly traded on stock exchanges, offering accredited investors direct access to diversified real estate portfolios with an illiquidity premium.
A pro forma in real estate is a projected financial statement that estimates future income and expenses for a property or investment, used to evaluate its potential profitability and viability.
A pro forma financial statement is a projected financial report for a real estate investment, forecasting future income, expenses, and cash flow based on a set of assumptions. It is a critical tool for evaluating investment viability, securing financing, and strategic planning.
A pro forma income statement is a forward-looking financial projection that estimates a property's future revenue and expenses over a specific period, typically used to assess the potential profitability and cash flow of a real estate investment.
The Pro-Rata Rule dictates that allocations, distributions, or liabilities are divided proportionally among parties based on their respective ownership percentages, contributions, or claims, commonly applied in 1031 exchanges and partnership agreements.
A professional network in real estate investing is a group of contacts, including other investors, agents, lenders, and contractors, who provide support, resources, and opportunities.
Profit is the financial gain realized from a real estate investment after all associated costs, expenses, and taxes have been subtracted from the total revenue generated.
Profit margin is a financial metric that measures the percentage of revenue that remains as profit after all costs and expenses have been deducted, indicating an investment's profitability and operational efficiency.
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