KEY INVESTMENT TERMS
These are some of the must know property investment terms. Dont forget to subscribe so you can be notified when we update new terms.
The legal document that determines who has ownership of a property. This is the document transferred from seller to buyer at closing.
Getting a new loan from the lender with better terms such as low interest rate or lower monthly payment. When home value rises, owners can pull out equity , known as cash out refinance.
COMPARABLES AKA COMPS
The prices of houses that have recently sold with similar characteristics to the house you are currently valuing. An evaluation of near by homes with give you a comparable. An appraiser determines most accurate comp.
The estimation of a property's market value by a licensed appraiser to assist banks in making loans to home buyers and investors.
Closing refers to the process where the deed of a property is transferred from seller to buyer. Closing costs compete the real estate transaction such as commissions, inspection fees, title work fees, taxes and more.
IRC Section 131 states that a properly structured 1O31 exchange simple allows an investor to sell their property for a profit and transfer all that money into a new property without paying capital gains taxis done properly.
The after repair value is the value of a property after it's been improved, renovated, or fixed up. It's the estimated future value of the property after repair. ARV is determined by referencing nearby comparable properties (comps) in similar condition, age, size, build, and style that have recently sold.
BUY & HOLD
Buy and hold real estate strategy is an investor buys a property, rents it out, and holds onto it for the long term typically five years or longer. As you gain experience and capital to work with, you can scale the strategy to create a series of income streams to grow your wealth over time.
FIX & FLIP
A fix and flip is a type of real estate business model where a real estate investor buys an investment property with the intent of selling it for a higher price than what was paid. The goal is for the sale (and subsequent profit) to happen as quickly as possible.