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.
Tax implications in real estate refer to the various taxes, deductions, and credits that affect an investor's profitability and financial obligations, encompassing income, property, capital gains, and estate taxes. Understanding these is crucial for optimizing investment returns and ensuring compliance.
A tax lien is a legal claim placed on a property by a government entity due to unpaid property taxes, taking precedence over most other liens.
A tax lien auction is a public sale where investors can purchase property tax liens from local governments, earning high-yield interest on delinquent property taxes until the property owner pays the debt or the investor can initiate foreclosure proceedings.
A tax strategy where investors sell assets at a loss to offset capital gains and a limited amount of ordinary income, reducing their overall tax liability.
Tax planning in real estate involves strategically optimizing an investor's tax liabilities through proactive financial and legal decisions, leveraging deductions, credits, and deferral strategies to maximize after-tax returns and ensure compliance.
A tax shelter is a legal financial arrangement or investment strategy designed to reduce or eliminate an investor's taxable income and, consequently, their tax liability.
Tax-advantaged investing involves strategies designed to minimize an investor's tax liability on investment income and gains, thereby maximizing after-tax returns. In real estate, this often includes leveraging deductions, deferrals, and credits.
Tax-deferred growth in life insurance refers to the accumulation of cash value within a permanent life insurance policy, where earnings grow without being taxed annually until withdrawn. This allows for compounding growth over time, offering a strategic financial tool for investors seeking liquidity and tax advantages.
Tax-free debt refers to financial strategies where the interest paid on borrowed money is tax-deductible, or the proceeds from a loan are not considered taxable income, providing significant tax advantages to real estate investors.
Tax-free growth refers to the increase in value of an investment or asset where the earnings, profits, or gains are not subject to taxation, allowing wealth to compound more rapidly.
Tax-free withdrawals refer to the ability to remove funds from an investment account or sale proceeds from an asset without incurring federal or state income tax, provided specific conditions are met.
A taxable conversion in real estate occurs when a property's use or status changes in a way that triggers an immediate tax liability, often due to a recharacterization of gains or depreciation.
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