Accessory Dwelling Unit (ADU)
Adjustable-Rate Mortgage (ARM)
Affordable housing refers to dwelling units that are designed to be economically priced for low-to-moderate-income individuals or families. This is often made possible through government subsidies or special financing programs.
After Repair Value (ARV)
Annual Depreciation Allowance
Annual Percentage Rate (APR)
Anticipated Hold Period
A basis point is equal to one one-hundredths of a percent. Basis points are commonly used in real estate as they relate to mortgage interest rates.
Broker Price Opinion (BPO)
Broker Price Opinion (BPO) Merge
- Buys a property,
- Rehabs the property,
- Rents the property out to qualified tenants,
- Refinances the property based on the higher value of the rehabbed and stabilized property, and
- Repeats the process, often using cash from a cash-out refi to finance the next purchase.
Capital expenditures (often called CapEx) are funds used to purchase, maintain, or update tangible assets. For example, funds used to renovate an existing rental property would be a capital expenditure.
Capital Gains Tax
Capital gains tax is the federal and/or state tax paid on profits from investments. For example, if you sell an investment property, you are typically taxed on the profits from the sale in accordance with federal and state income tax laws. Capital gains are typically taxed at a lower rate than normal “earned” income.
Comparative Market Analysis (CMA)
An analysis done to estimate a home's price based on recent sales of similar properties in the immediate area.
Compound Annual Growth Rate (CAGR)
Core Real Estate Investments
Real estate crowdfunding is when several people invest in a particular property together, allowing each investor to have a share percentage in the property. Investors are usually connected through online sites. The crowdfunding platform manages the project until completed and distributes profits from the property to investors.
Debt-to-Income Ratio (DTI)
Digital Real Estate
Digital real estate can refer to online assets, such as domain names, websites, or digital businesses, that can be bought, sold, or rented. In more recent years, it has become synonymous with “virtual real estate,” which refers specifically to plots of digital land and digital structures in virtual reality “Metaverses.”
Dollar Cost Averaging
Effective Gross Income
Estimated Total Cash Return
Estimated Total Gain
Fair Housing Act
Fair Market Value (FMV)
For Rent by Owner (FRBO)
For Sale by Owner (FSBO)
FSBO properties are listed for sale directly by the property’s owner, without involving a real estate agent or broker.
Fund of Funds
Gross Operating Income (GOI)
Gross Rental Yield (GRY)
Gross Scheduled Income (GSI)
Homeowners Association (HOA)
Industrial Investing Entity
Leverage is the use of borrowed capital (debt) to increase the potential return of an investment.
Loan Origination Fee
A mortgage is a type of loan used to purchase real estate. The borrower agrees to pay the lender over time, and property serves as collateral to secure the loan.
Mortgage Insurance Premium (MIP)
Net Cash Flow
A non-recourse loan is a loan secured by an asset, which is to be used as collateral in the case of default. In a non-recourse loan, the lender cannot seek additional compensation outside of the collateral. As an example, mortgages are typically non-recourse loans, secured by the home. If the owner defaults, the lender may foreclose on the property, but may not seek additional damages from the borrower.
Opportunistic Real Estate Investments
Private Mortgage Insurance (PMI)
Projected Annual Appreciation
A purchase agreement is a contract for the expected transfer of a property. The buyer and seller outline their intentions for the transfer of the property, including price, terms, and contingencies.
Ready-to-Issue (RTI) Permit
Real Estate Agent
Real Estate Fund
Real Estate Owned (REO)
Regulation D outlines exemptions from SEC regulation requirements for companies who wish to raise private capital by offering private securities (like equity shares, for example).
Rent To Own
Repair and Maintenance Expense
SEC Rule 506c
Self-Directed Individual Retirement Account (SDIRA)
A method of deferring taxes on investment profits by rolling the profits directly into a new investment project.
Value-Add Real Estate Investments