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.
Sustainability in real estate refers to the practice of developing, managing, and investing in properties that minimize environmental impact, enhance social well-being, and adhere to strong governance principles, aiming for long-term value creation and resilience.
A swap rate is the fixed interest rate exchanged for a floating interest rate in an interest rate swap, reflecting the market's expectation of future interest rates and credit risk. It is a critical benchmark for pricing and hedging various financial instruments, including commercial real estate loans.
Sweat equity refers to the increase in property value or ownership stake that results from the labor and effort of the owner or investor, rather than from direct financial investment. It's commonly seen in fix-and-flip projects or owner-occupied renovations.
Target asset allocation in real estate investing defines the desired mix of different property types, geographic locations, and investment strategies within an investor's portfolio to align with their financial goals and risk tolerance. It's a strategic blueprint for portfolio construction.
A target market in real estate investing refers to a specific group of potential tenants or buyers, or a particular property type or geographic area, that an investor aims to serve or acquire based on detailed analysis.
Task Batching is a productivity technique where similar tasks are grouped together and completed consecutively to minimize context switching and improve efficiency, especially useful for real estate investors managing diverse responsibilities.
Task prioritization is the process of organizing and ranking your real estate investing activities based on their urgency and importance to maximize efficiency and achieve your financial goals.
A tax abatement is a temporary reduction or elimination of property taxes granted by a government entity to encourage economic development, revitalization, or specific types of construction within a designated area.
Tax advantages in real estate investing refer to the various legal deductions, credits, and deferrals that can reduce an investor's taxable income and overall tax burden, making real estate a tax-efficient asset class.
Tax bracket management is a strategic financial planning approach focused on controlling taxable income and deductions to keep an investor's income within lower tax brackets or minimize overall tax liability, especially relevant for real estate investors leveraging various tax benefits.
A tax credit is a direct reduction in the amount of tax owed, dollar-for-dollar, providing a significant financial benefit to real estate investors by lowering their overall tax liability.
Tax deferral is the legal postponement of paying taxes on investment gains or income until a future date, allowing capital to remain invested and grow through compounding.
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