Contracts, regulations, compliance, entity structures, zoning, permits, and landlord-tenant law.
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Foundation terms you need to know first (88 terms)
Development costs are all the expenses incurred during the process of acquiring land, designing, constructing, and preparing a real estate project for use or sale, from start to finish.
Base rent is the fixed, minimum rent amount paid by a tenant to a landlord for the use of a property, excluding additional charges like operating expenses, taxes, or utilities.
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.
The Lease Commencement Date is the official date specified in a lease agreement when the tenant's rights and obligations, including rent payments and property responsibilities, legally begin.
An application fee is a non-refundable charge paid by a prospective tenant to a landlord or property manager to cover the costs associated with processing a rental application, including background and credit checks.
Complex strategies and professional concepts (103 terms)
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.
The accounting process of recognizing the estimated cost of an Asset Retirement Obligation (ARO) as a liability and capitalizing a corresponding asset, which is then depreciated over its useful life, reflecting the future costs associated with retiring a long-lived asset.
A legally binding contract that alters the priority of liens on a property, allowing a senior lienholder to voluntarily place their claim in a junior position to another, typically to facilitate new financing or complex transactions.
Unrelated Business Income Tax (UBIT) is a tax levied on the net income of a tax-exempt organization, including certain real estate investment vehicles, derived from a trade or business regularly carried on and not substantially related to its exempt purpose.
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.
A 1-4 Family Rider is a mortgage contract addendum for properties with one to four residential units, granting the lender additional rights and protections, particularly concerning rental income in the event of borrower default.
A 1031 Exchange allows real estate investors to defer capital gains and depreciation recapture taxes when selling an investment property by reinvesting the proceeds into a new "like-kind" investment property within strict IRS timelines.
An absentee owner is an individual or entity that owns real estate but does not reside in or personally manage the property, typically living in a different geographic location.
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.
A comprehensive, chronological summary of all recorded documents and legal proceedings affecting the title to a specific parcel of real estate, tracing its ownership history.
Acceptance in real estate is the unconditional agreement by a buyer or seller to the exact terms of an offer, forming a legally binding contract for a property transaction.
An Accessory Dwelling Unit (ADU) is a secondary housing unit on a single-family residential lot, offering independent living facilities for one or more persons, often used by investors to generate additional rental income or increase property value.
An Accredited Investor is an individual or entity meeting specific SEC-defined financial thresholds or professional qualifications, enabling them to invest in private, unregistered securities and exclusive opportunities.
Accretion expense represents the periodic increase in the carrying amount of a liability or asset to reflect the passage of time, typically for obligations initially recorded at a discounted present value. It is a non-cash expense that aligns the book value with the ultimate settlement amount.
An Acquisition Agreement is a legally binding contract outlining the terms and conditions between a buyer and seller for the purchase and sale of a real estate asset, crucial for defining the transaction's scope and protecting all parties.
An acquisition fee is an upfront charge in real estate syndications or funds, compensating the sponsor for identifying, evaluating, negotiating, and closing a property deal. It's typically a percentage of the purchase price or equity raised, impacting initial capital and overall investment returns.
Adaptive reuse is a real estate strategy that converts an existing building from its original purpose into a new, often more profitable use, preserving the structure while meeting modern market demands.
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