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.
The amount of compensation an S-Corporation owner, who also works for the business, must pay themselves that is comparable to what an unrelated party would be paid for similar services, to comply with IRS regulations and avoid reclassification of distributions.
A recession is a significant, widespread, and prolonged decline in economic activity, typically characterized by negative Gross Domestic Product (GDP) growth, rising unemployment, and reduced consumer spending, impacting real estate markets through decreased demand and property values.
A recession-resistant asset is an investment that tends to maintain or increase its value and generate stable income even during economic downturns, often due to providing essential goods or services.
Recognized gain is the portion of a capital gain from the sale or exchange of an asset that is immediately subject to taxation in the current tax period. It represents the profit realized that cannot be deferred or excluded under specific tax provisions.
A type of loan where the lender can seize not only the collateral but also other assets of the borrower if the collateral value is insufficient to cover the debt after a default.
The Recovery Phase is a stage in the real estate market cycle following a downturn, characterized by stabilizing prices, increasing transaction volumes, and a gradual return of investor confidence, signaling the beginning of an upward trend.
A legally defined timeframe after a foreclosure sale during which the original homeowner can reclaim their property by paying the full outstanding debt, plus costs and interest.
Redevelopment is the process of transforming an existing, often underutilized or distressed, property or land into a more productive and valuable asset, typically involving significant renovation, demolition, or a change in use.
A referral in real estate is when one professional or client recommends another to a new client, often in exchange for a fee, facilitating new business opportunities based on trust.
Refinancing in real estate involves replacing an existing mortgage with a new one, typically to secure more favorable terms, lower interest rates, or access accumulated equity.
Refinancing is the process of replacing an existing mortgage or loan with a new one, often to secure better terms, lower interest rates, or access built-up property equity.
Refinancing risk is the potential for an investor to be unable to refinance existing debt on favorable terms, or at all, when the current loan matures or a new financing need arises. This risk can lead to increased costs, reduced cash flow, or even foreclosure.
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