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 Section 179 Deduction allows businesses, including real estate investors operating as active businesses, to deduct the full purchase price of qualifying equipment or software placed in service during the tax year, rather than depreciating it over several years.
The Section 8 Housing Program, officially known as the Housing Choice Voucher Program, is a federal initiative that helps low-income families, the elderly, and people with disabilities afford safe, decent, and sanitary housing in the private market.
A secured loan is a debt backed by collateral, such as real estate, which the lender can seize if the borrower defaults, offering lower interest rates due to reduced risk.
Securities fraud involves deceptive practices, material misrepresentations, or omissions in the sale or purchase of securities, often leading to financial losses for investors and violating federal and state securities laws.
Self-dealing occurs when a fiduciary acts in their own best interest rather than the best interest of the person or entity they represent, creating a conflict of interest.
A Self-Directed 401(k) is a retirement plan for self-employed individuals and small business owners with no full-time employees, allowing them to invest retirement funds in a broader range of assets, including real estate, private equity, and other alternative investments, beyond traditional stocks and bonds.
A Self-Directed IRA (SDIRA) is a specialized retirement account allowing investors to hold alternative assets like real estate, private equity, and precious metals, offering enhanced control but requiring strict adherence to complex IRS regulations to avoid prohibited transactions and Unrelated Business Income Tax (UBIT).
A specialized retirement investment structure where a Self-Directed IRA owns an LLC, granting the account holder "checkbook control" to directly invest in alternative assets like real estate, while maintaining tax-advantaged growth.
Seller financing is an arrangement where the seller of a property provides a loan to the buyer, who then makes payments directly to the seller instead of obtaining a traditional mortgage.
A real estate market condition where low inventory and high buyer demand give sellers a significant advantage, leading to higher prices and faster sales.
A senior lien is a legal claim on a property that holds the highest priority for repayment in the event of a foreclosure or liquidation, ensuring its holder is paid before any other creditors.
A Series LLC is a legal entity structure allowing for multiple, distinct "series" within a single LLC, each with segregated assets and liabilities, offering enhanced asset protection and administrative efficiency for multi-asset portfolios.
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