REIPRIME Logo
Intermediate2 hours17 terms

Free Look Period: Key Terms Collection

This curated collection offers key terms that might be helpful when navigating the 'free look period' in real estate investment. It's designed as a quick reference to clarify commonly referenced concepts, supporting your understanding without providing comprehensive legal or investment advice.

Term Collection

1

Contingency Clause

A contingency clause in a real estate contract is a condition that must be met for the agreement to become legally binding, providing an escape route if specified terms are not satisfied.

Intermediate13-14 min
2

Capital Expenditures

Capital Expenditures (CapEx) are significant funds spent by a real estate investor to acquire, upgrade, or extend the useful life of a property, rather than for routine maintenance or operating expenses. These investments enhance the property's value and are typically depreciated over time for tax purposes.

Intermediate14-15 min
3

Feasibility Study

A comprehensive assessment of a proposed real estate project or investment to determine its viability, practicality, and potential for success across market, technical, financial, operational, and legal aspects.

Intermediate12-13 min
4

Underwriting

Underwriting is the process by which lenders assess the risk of lending money for a real estate transaction, evaluating the borrower's creditworthiness and capacity to repay, as well as the property's value and marketability.

Intermediate15-18 min
5

Pro Forma

A pro forma in real estate is a projected financial statement that estimates future income and expenses for a property or investment, used to evaluate its potential profitability and viability.

Intermediate14-15 min
6

Due Diligence Period

The Due Diligence Period is a contractual timeframe in real estate during which a buyer thoroughly investigates a property's condition, financials, and legal standing to make an informed purchase decision.

Intermediate13-16 min
7

Private Placement Memorandum

A Private Placement Memorandum (PPM) is a legal document provided to prospective investors in a private securities offering, detailing the investment opportunity, management, terms, and all associated risks to ensure compliance with securities laws and facilitate informed decision-making.

Advanced14 min
8

Due Diligence

Due diligence is the critical process of investigating and verifying all material facts about a property and its financials before a real estate acquisition, aiming to identify risks and ensure an informed investment decision.

Intermediate14-15 min
9

Risk Management

Risk management in real estate is the systematic process of identifying, assessing, and controlling potential threats to an investor's capital and returns, ensuring long-term asset protection and profitability.

Intermediate12-13 min
10

Earnest Money

Earnest money is a deposit made by a buyer to a seller, held in escrow, demonstrating the buyer's serious intent to purchase a property and serving as security against buyer default.

Intermediate13-14 min
11

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
12

Property Inspection

A property inspection is a visual examination of a property's condition by a qualified professional to identify defects, safety hazards, and maintenance needs before purchase.

Intermediate13-14 min
13

Purchase Agreement

A Purchase Agreement is a legally binding contract that outlines the terms and conditions of a real estate transaction, formalizing the buyer's offer and the seller's acceptance.

Intermediate12-13 min
14

Commercial Lease Review

Commercial lease review is the meticulous examination of a commercial lease agreement by an investor or their legal counsel to understand all terms, conditions, financial obligations, and potential risks before acquisition or execution.

Advanced8-9 min
15

Title Search

A title search is a comprehensive examination of public records to confirm a property's legal ownership and identify any claims, liens, or encumbrances against it, ensuring a clear title for real estate transactions.

Intermediate11-12 min
16

Operating Expenses

Operating expenses are the ongoing costs of running and maintaining a real estate investment property, excluding mortgage principal and interest payments, and capital expenditures.

Beginner13-14 min
17

Net Operating Income

Net Operating Income (NOI) is a key real estate metric representing a property's annual income after deducting all operating expenses, but before accounting for debt service, income taxes, and capital expenditures.

Intermediate11-12 min

Common Questions