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.
The Peak Phase is the highest point in a real estate market cycle, characterized by maximum property values, strong demand, and robust economic activity, just before a market downturn or correction.
Peer-to-Peer (P2P) lending connects individual investors directly with borrowers, often facilitated by online platforms, bypassing traditional financial institutions. In real estate, it provides alternative financing for projects and allows investors to fund loans for properties.
Performance measurement in real estate investing involves tracking and analyzing key financial metrics to evaluate how well an investment is performing against its goals and market benchmarks. It helps investors make informed decisions and optimize their strategies.
A compensation structure where a portion or all of a payment is contingent upon achieving specific, pre-defined performance metrics or outcomes, commonly used in real estate development, property management, and investment syndications to align interests.
Permanent financing is a long-term real estate loan, typically 5-30 years, used for stabilized properties or to replace short-term construction/bridge loans, characterized by amortization and predictable debt service.
A permanent rate buydown is a mortgage financing strategy where a borrower or seller pays an upfront fee, known as discount points, to reduce the interest rate on a loan for its entire term, resulting in lower monthly payments.
A legal process for individuals to eliminate or repay debts under federal law, significantly impacting credit, asset ownership, and future real estate investment capabilities.
Phantom equity is a compensation structure that grants employees or partners a financial stake in a company's future value appreciation without conferring actual ownership, voting rights, or direct equity. It mirrors the economic benefits of equity ownership, typically tied to specific performance metrics or exit events.
A legal doctrine allowing courts to disregard the limited liability protection of a corporation or LLC, holding its owners personally responsible for the entity's debts or actions, typically due to abuse of the corporate form.
A Planned Unit Development (PUD) is a type of real estate development that allows for a mix of land uses and housing types within a single, master-planned community, offering design flexibility and integrating common open spaces and amenities.
Portfolio growth in real estate investing refers to the strategic increase in the value, cash flow, or number of properties within an investor's real estate holdings over time, typically achieved through reinvestment, value-add strategies, and market appreciation.
A portfolio lender is a financial institution that originates and holds loans on its own balance sheet, providing flexible underwriting and customized terms for real estate investors, particularly for complex or non-conforming properties.
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