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.
A Commercial Mortgage-Backed Security (CMBS) loan is a form of commercial real estate financing where multiple commercial mortgages are pooled, securitized into bonds, and sold to investors, offering non-recourse debt for large-scale properties.
Calculated risk is an investment strategy where potential financial or strategic actions are taken after thoroughly assessing, quantifying, and developing mitigation strategies for all associated risks. It's an informed decision based on data and analysis, not a gamble.
A capital account tracks an investor's equity stake in a real estate partnership or LLC, reflecting contributions, distributions, and their share of profits or losses.
Capital accumulation is the process of increasing one's wealth or assets over time by saving, investing, and reinvesting earnings to build a larger financial base.
Capital allocation is the strategic process of distributing financial resources across various investments or projects to achieve specific financial objectives, balancing risk and return.
A capital call is a formal request by a fund manager for investors to contribute a portion of their previously committed capital to an investment fund or syndication, typically to fund new acquisitions or project expenses.
A Capital Expenditure Budget is a financial plan outlining anticipated costs for major property repairs, renovations, and improvements that extend asset life or enhance value over a specific period.
Capital Gains Tax is a tax on the profit realized from the sale of a non-inventory asset, such as real estate, calculated as the difference between the selling price and the adjusted cost basis.
Capital intensity measures the amount of capital required to produce a unit of output or generate revenue, indicating how asset-heavy an investment or business is.
Capital markets are financial markets where long-term debt or equity-backed securities are bought and sold, providing the funding necessary for businesses and governments, including real estate developers and investors, to finance their long-term projects.
Capital preservation is an investment objective focused on safeguarding the initial investment principal from loss, prioritizing risk minimization and stability over aggressive growth. It's a strategy to protect wealth, especially in volatile markets or for risk-averse investors.
Capital raising is the process of securing financial resources, through either debt or equity, to fund real estate investment projects and expand an investor's portfolio.
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