Different approaches to real estate investing including buy-and-hold, fix-and-flip, BRRRR, wholesaling, REITs, and syndications.
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Foundation terms you need to know first (153 terms)
Equity investment in real estate involves directly owning a portion or all of a property, providing the investor with an ownership stake and the potential to benefit from appreciation and rental income.
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.
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.
An office building is a commercial property designed for businesses to conduct administrative, professional, or commercial operations, offering spaces for work and meetings.
A traditional bank mortgage is a conventional loan provided by a financial institution to purchase real estate, following guidelines from Fannie Mae and Freddie Mac, commonly used by investors to finance properties.
Complex strategies and professional concepts (144 terms)
Slow BRRRR is an advanced real estate investment strategy that extends the traditional BRRRR (Buy, Rehab, Rent, Refinance, Repeat) cycle over a longer period, often several years, to maximize equity appreciation and mitigate market risks.
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.
Equity dilution occurs when a company or investment vehicle issues new shares, decreasing the ownership percentage of existing shareholders. In real estate, this often happens in syndications or partnerships when additional capital is raised.
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.
Capital stacking is an advanced real estate financing strategy involving the layering of multiple debt and equity instruments to fund a property acquisition or development, optimizing the capital structure for specific risk-return profiles.
A DSCR loan is a non-qualified mortgage for real estate investors, where loan eligibility is determined by the investment property's Debt Service Coverage Ratio (DSCR), assessing its ability to generate enough income to cover its mortgage payments, rather than the borrower's personal income.
A temporary, short-lived recovery in asset prices during a prolonged bear market, often characterized by a lack of fundamental support and followed by a continuation of the downtrend.
Deal flow refers to the continuous stream of potential real estate investment opportunities presented to an investor. It is crucial for maintaining a robust pipeline of properties to evaluate and acquire, ensuring consistent portfolio growth and competitive advantage.
The Debt Avalanche is a debt repayment strategy focused on paying off debts with the highest interest rates first, while making minimum payments on all other debts, to minimize total interest paid and accelerate debt elimination.
Debt consolidation is a financial strategy where multiple debts, often with varying interest rates and terms, are combined into a single, new loan, typically with a lower interest rate or more favorable payment structure.
Debt financing in real estate involves borrowing money from a lender to acquire, develop, or refinance properties, using the property itself as collateral. It allows investors to leverage capital, amplify returns, and scale their portfolios.
Debt paydown is the process of reducing the outstanding principal balance of a loan, such as a mortgage, over time. This gradual reduction builds equity and increases an investor's ownership stake in a property.
Debt recycling is an advanced financial strategy where non-tax-deductible debt, typically a primary home mortgage, is converted into tax-deductible debt by using the equity to acquire income-producing assets.
Debt reduction is the strategic process of paying down outstanding loan balances, particularly mortgages, faster than scheduled to minimize interest expenses, increase equity, and improve an investor's financial position.
A Debt-for-Property Swap is an advanced real estate transaction where a debtor transfers ownership of a property to a creditor in full or partial satisfaction of an outstanding debt, often used in distressed situations or for strategic asset acquisition.
A Declaration of Trust is a legally binding document that formally acknowledges the beneficial ownership of a property, distinguishing it from the legal title holder. It clarifies the rights and responsibilities of all parties involved, particularly in co-ownership or nominee arrangements.
Decreasing term life insurance is a type of term life insurance where the death benefit decreases over the policy's term, typically aligning with a declining debt such as a mortgage, while premiums usually remain level.
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