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.
A Registered Investment Advisor (RIA) is a financial professional or firm that provides investment advice and manages portfolios for clients, operating under a strict fiduciary duty to act in the client's best interest at all times.
Regulation D provides exemptions from SEC registration for private offerings, enabling companies, including real estate syndicators, to raise capital from accredited and sophisticated investors under specific rules.
Regulatory compliance in real estate investing refers to adhering to all applicable federal, state, and local laws, rules, and regulations governing property acquisition, ownership, management, and disposition to avoid legal penalties and financial losses.
The regulatory environment in real estate investing encompasses the laws, rules, and government policies that govern property acquisition, development, ownership, and management, significantly impacting investment decisions and operational strategies.
Real estate rehabilitation is the process of extensively repairing and upgrading a distressed property to restore it to an improved condition, significantly increasing its value and functionality for sale or rent.
A transaction between parties who have a pre-existing relationship, such as family members, business partners, or entities under common control, which can raise concerns about fairness and arm's length dealing.
A contractual provision allowing a party to be freed from specific obligations or to free certain assets from a lien or encumbrance upon the fulfillment of predefined conditions, often involving a payment or performance.
Relocation assistance refers to financial or logistical support provided to individuals or businesses to facilitate a move to a new location, often used by real estate investors to incentivize tenants to vacate a property for redevelopment or sale.
Legal actions available to a non-breaching party in a real estate transaction to seek compensation or enforcement when another party fails to fulfill their contractual obligations.
Remote closing allows real estate transactions to be completed without all parties physically present, leveraging digital tools for document signing, notarization, and fund transfers. It offers convenience and efficiency, especially for out-of-state investors.
A Renovation Plan is a comprehensive document outlining the scope of work, budget, timeline, and resources required for property improvements, crucial for managing real estate investment projects effectively and maximizing returns.
Rent collection is the systematic process by which landlords or property managers receive rental payments from tenants, encompassing payment terms, processing, tracking, and handling delinquencies to ensure consistent cash flow for investment properties.
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