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Leverage in real estate is the use of borrowed capital, typically through mortgages, to finance property purchases and amplify potential investment returns.
Debt capacity is the maximum amount of debt an individual or entity can prudently take on while maintaining financial stability and meeting repayment obligations. For real estate investors, it's a critical metric for assessing borrowing limits, managing risk, and planning portfolio expansion.
Cash-on-Cash Return (CoC) is a real estate investment metric that calculates the annual pre-tax cash flow generated by a property as a percentage of the total cash an investor has invested.
Delegation in real estate investing involves strategically assigning specific tasks, authority, and responsibility to other individuals or entities, such as property managers, virtual assistants, or contractors. This practice enables investors to optimize their time, leverage specialized expertise, and scale their portfolios more efficiently.
Deep Work refers to professional activities performed in a state of distraction-free concentration that push your cognitive capabilities, leading to new value creation and skill improvement for real estate investors.
A buyer's market is a real estate condition where the supply of available properties exceeds the demand from buyers, giving buyers more leverage in negotiations and leading to potentially lower prices and more favorable terms.
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.
A professional network in real estate investing is a group of contacts, including other investors, agents, lenders, and contractors, who provide support, resources, and opportunities.
A real estate podcast is an audio program featuring interviews with investors and experts, offering education, strategies, and market insights for real estate investing.
An interest-only loan is a debt where the borrower pays only the interest on the principal balance for a set period, with no principal reduction during that time. This results in lower initial monthly payments.
A Buyer's List is a database of pre-qualified individuals or entities actively seeking to purchase investment properties, detailing their specific criteria and contact information, used to facilitate quick and efficient property dispositions.
A down payment is an initial upfront payment made when purchasing a property, representing a portion of the total purchase price and reducing the amount of money borrowed through a mortgage.
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.
Predictive analytics in real estate utilizes historical data, statistical models, and machine learning to forecast future market trends, property values, and investment outcomes, enabling proactive decision-making for investors.
A financing strategy is a comprehensive plan detailing how a real estate investor will fund property acquisitions, manage capital, and structure deals to achieve investment objectives while controlling risk.
Investment capacity is an investor's total ability to acquire and manage new real estate assets, considering financial resources, debt access, risk tolerance, and operational capabilities. It dictates the scale and pace of portfolio expansion.
Outsourcing in real estate involves delegating specific tasks or functions to external third-party providers to improve efficiency, reduce costs, and allow investors to focus on core investment strategies.
A 401(k) loan allows participants to borrow a portion of their vested retirement savings, repaying the principal and interest back into their own account, often used by real estate investors for short-term capital needs like down payments or rehabilitation.
Seasonality in real estate refers to predictable fluctuations in market activity, property values, and rental rates that occur at specific times of the year, driven by factors like weather, holidays, and school calendars.