Intermediate terms

Advanced Deal Strategies: Key Terms

This curated collection highlights key terms that might be helpful when exploring advanced real estate investment strategies. It's designed as a quick reference to commonly referenced concepts beyond conventional deals, supporting your learning journey without claiming comprehensive coverage.

Learning Path

Private Money Loan

A private money loan is a non-bank loan provided by individuals or private companies, secured by real estate, offering flexible terms and fast funding for real estate investors.

Intermediate12-13 min

Real Estate Networking

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.

Beginner5 min

Seller Financing

Seller financing is an arrangement where the seller of a property provides a loan to the buyer, who then makes payments directly to the seller instead of obtaining a traditional mortgage.

Intermediate13-14 min

Subject-To Investing

Subject-To investing is an advanced real estate strategy where an investor acquires a property by taking over payments on the seller's existing mortgage, without formally assuming the loan or notifying the lender.

Advanced12-15 min

Mezzanine Financing

Mezzanine financing is a hybrid debt-equity instrument used in real estate to bridge the gap between senior debt and sponsor equity, offering higher leverage at a higher cost due to its subordinated position in the capital stack.

Intermediate13-16 min

Debt Service Coverage Ratio

The Debt Service Coverage Ratio (DSCR) is a financial metric used in commercial real estate lending to assess a property's ability to generate sufficient Net Operating Income (NOI) to cover its annual mortgage debt payments.

Advanced15-18 min

Waterfall Distribution

Waterfall distribution is a tiered profit-sharing structure in real estate syndications, dictating how cash flow and profits are allocated among investors and sponsors based on predefined hurdle rates and preferred returns.

Advanced13-16 min

1031 Exchange

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.

Advanced15-18 min

Property Underwriting

Property underwriting is the comprehensive process of evaluating the risks and potential returns of a real estate investment to determine its suitability for acquisition or financing, involving detailed financial, market, and property-specific analysis.

Advanced8-9 min

Capital Stack

The capital stack is the hierarchical structure of all debt and equity financing used to fund a real estate investment, defining the priority of payment, risk, and return for each capital source.

Advanced13-16 min

Opportunity Zone Investing

Opportunity Zone Investing is a tax-advantaged strategy allowing investors to defer, reduce, and potentially eliminate capital gains taxes by reinvesting eligible gains into Qualified Opportunity Funds (QOFs) that develop or operate businesses in designated low-income communities.

Advanced13 min

Alternative Capital Sources

Alternative capital sources are non-traditional funding options for real estate investments, including private money, hard money, seller financing, and crowdfunding, offering flexibility and speed for deals that may not qualify for conventional bank loans.

Intermediate13-16 min

Equity Partnership

An Equity Partnership is a real estate investment structure where multiple parties contribute capital for an ownership stake in a property or project, sharing in profits and risks through a defined distribution waterfall.

Advanced6 min

Cost Segregation

Cost Segregation is an IRS-approved tax strategy that reclassifies components of a commercial or residential rental property into shorter depreciation schedules, accelerating tax deductions and boosting immediate cash flow for real estate investors.

Intermediate13-14 min

Direct to Seller

Direct to Seller is a real estate investment strategy where investors directly contact property owners to negotiate and acquire properties, bypassing traditional market channels like real estate agents or the MLS.

Intermediate13-14 min

Scaling Real Estate Portfolio

Scaling a real estate portfolio involves the systematic and strategic expansion of property holdings, focusing on optimized operations, advanced financing, and strategic acquisitions to achieve exponential, sustainable growth and maximize long-term wealth.

Advanced5 min

Multi-Family Investing

Multi-family investing involves acquiring properties with multiple residential units to generate rental income, benefit from economies of scale, and achieve long-term appreciation. It's a strategy for diversifying income and scaling a real estate portfolio.

Intermediate5-6 min

Real Estate Syndication

Real estate syndication is a private equity strategy where multiple investors pool capital to acquire and manage large-scale real estate assets, typically led by a sponsor (General Partner) for passive Limited Partners.

Advanced14-15 min