Contracts, regulations, compliance, entity structures, zoning, permits, and landlord-tenant law.
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Foundation terms you need to know first (89 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 (117 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.
An inspection contingency is a clause in a real estate purchase agreement that allows the buyer to conduct a professional home inspection and, based on the findings, negotiate repairs, request credits, or withdraw from the contract without losing their earnest money deposit.
Intangible assets are non-physical assets that hold significant value for a real estate investment or business, contributing to its competitive advantage and long-term profitability, though they lack physical form.
Interest abatement is a reduction or elimination of interest payments on a loan, often granted by a lender or government entity as an incentive for specific real estate development or economic activities.
Interest Expense Tracing Rules, codified under Treasury Regulation § 1.163-8T, are IRS guidelines that dictate how taxpayers must allocate interest expense based on the use of the debt proceeds, thereby determining its deductibility for tax purposes.
Internal controls are systematic processes and procedures implemented by real estate investors and property managers to safeguard assets, ensure the accuracy and reliability of financial data, promote operational efficiency, and ensure compliance with laws and regulations. They are critical for mitigating risks and achieving investment objectives.
The Internal Revenue Code (IRC) is the comprehensive body of federal tax law in the United States, governing all aspects of taxation, including income, estate, gift, and excise taxes, with significant implications for real estate investors.
The Internal Revenue Service (IRS) is the U.S. federal agency responsible for collecting taxes and enforcing tax laws, playing a crucial role in real estate investing through income, deductions, and capital gains regulations.
Inventory valuation in real estate is the process of assigning a monetary value to properties held for sale or development, crucial for financial reporting and investment analysis.
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.
Investment control in real estate refers to the degree of influence and decision-making authority an investor has over their real estate assets, operations, and investment vehicles.
Investment fraud refers to deceptive practices that induce investors to make purchases or sales based on false information, often resulting in significant financial losses. It encompasses a broad range of illicit schemes designed to exploit investor trust and capital.
A joint mortgage is a home loan taken out by two or more borrowers who share equal responsibility for the debt, pooling their incomes and assets to qualify for financing and typically sharing ownership of the property.
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