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 legal document outlining the ownership, management, and operational procedures of a Limited Liability Company (LLC), crucial for defining member rights and protecting personal assets in real estate investments.
An Operating Company (OpCo) is a legal entity established by real estate investors to conduct the active, day-to-day management, leasing, and maintenance of properties, distinct from entities that merely hold asset ownership.
Opportunistic investing in real estate involves targeting high-risk, high-reward properties or strategies that capitalize on market dislocations, distressed assets, or complex situations to generate outsized returns.
The value of the next best alternative that was not taken when a decision was made, representing the potential benefits missed from choosing one investment option over another in real estate.
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.
Opportunity Zones are a federal program offering tax incentives for investors who reinvest capital gains into designated economically distressed communities through Qualified Opportunity Funds (QOFs), aiming to spur economic development and job creation.
An option contract in real estate grants a buyer the exclusive right, but not the obligation, to purchase a property at a predetermined price within a specific period, in exchange for a non-refundable fee.
The Option Expiration Date is the final day on which a real estate option holder can exercise their right to purchase or lease a property under the agreed-upon terms.
The non-refundable fee paid by a potential buyer to a seller for the exclusive right to purchase a property at a predetermined price within a specified timeframe.
An Option to Purchase Land is a contractual agreement giving a buyer the exclusive right, but not the obligation, to buy a specific property at a predetermined price within a set period, in exchange for a non-refundable fee.
Out-of-state investing involves purchasing and managing investment properties in a different state from your primary residence, often to access better market opportunities or higher returns.
Out-of-state lending refers to securing financing for a real estate investment property located in a different state than the borrower's primary residence or the lender's main operational base. It enables investors to expand their portfolios beyond local markets.
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