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 hard money lender provides short-term, asset-based loans secured by real estate, primarily focusing on the property's value and the investor's exit strategy rather than traditional creditworthiness.
A hard money loan is a short-term, asset-backed real estate loan from private lenders, primarily based on the property's value rather than the borrower's credit, used for quick acquisitions or rehab projects.
Hedge effectiveness measures the degree to which a hedging instrument offsets changes in the fair value or cash flows of a hedged item, crucial for managing financial risks in real estate portfolios.
Hedging in real estate investing involves employing strategies or financial instruments to offset potential losses from adverse price movements, interest rate fluctuations, or other market risks, thereby protecting an investment's value or cash flow.
Hedging in real estate is a risk management strategy involving the use of financial instruments or offsetting positions to mitigate potential losses from adverse market movements, such as interest rate fluctuations or property value declines.
Herd mentality in real estate refers to the tendency of investors to follow the actions of a larger group, often ignoring their own analysis or fundamental market indicators, leading to market bubbles or crashes.
A high-interest-rate environment is a period characterized by elevated borrowing costs, typically driven by central bank policies to combat inflation, significantly impacting real estate financing, property values, and investment strategies.
A High-Net-Worth Individual (HNWI) is a person or a household with a significant amount of liquid financial assets, typically defined as having at least $1 million in investable assets, excluding their primary residence.
A highest and best offer is a request from a seller or their agent for all interested buyers to submit their strongest financial and contractual proposals by a specific deadline, typically in a competitive market.
A holding company is a corporate entity that owns controlling interests in other companies or assets, primarily used in real estate for advanced asset protection, liability segregation, and tax optimization across a portfolio.
Holding costs are the recurring expenses associated with owning a real estate property, such as property taxes, insurance, utilities, and mortgage interest, incurred from acquisition until sale or consistent income generation.
The holding period is the length of time an investor owns a real estate asset, directly influencing capital gains taxation, investment strategy, and overall financial returns.
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