For the next 30 days we will be doing some real estate acronyms and tips:
They will all be in this thread
They will all be in this thread
CRE=Commercial real estate
PE= Private equity
IRR= Internal rate of return
More in depth vocab and acronyms to come :) this was just a taste of some real basics
PE= Private equity
IRR= Internal rate of return
More in depth vocab and acronyms to come :) this was just a taste of some real basics
8/6/2019 Second Day:
We are starting the vocab off basic. It will become more advanced in time.
NOI=Net Operating Income
Gross income-Vacancy and Operating Expenses=NOI
This shows you the base profitability of your investment.
Detailed Thread below:
We are starting the vocab off basic. It will become more advanced in time.
NOI=Net Operating Income
Gross income-Vacancy and Operating Expenses=NOI
This shows you the base profitability of your investment.
Detailed Thread below:
8/7/2019 Third Day:
Tonight is just some light acronyms. Cap rate comes tomorrow
ARV: After-Repaired Value
COO: Certificate of Occupancy
P and S: Purchase and sales agreement
JV: Joint Venture
LTV: Loan to value
Real Estate has a lot of acronyms. Its best to learn them
Tonight is just some light acronyms. Cap rate comes tomorrow
ARV: After-Repaired Value
COO: Certificate of Occupancy
P and S: Purchase and sales agreement
JV: Joint Venture
LTV: Loan to value
Real Estate has a lot of acronyms. Its best to learn them
8/8//2019 Fourth Day:
This thread is on Cap Cate. It is a companion to our NOI thread a couple nights ago.
Enjoy :D
This thread is on Cap Cate. It is a companion to our NOI thread a couple nights ago.
Enjoy :D
8/9/2019 Fifth Day:
NPV: Net Present Value
IRR: Internal Rate of return.
I will be doing threads on these guys in the coming days.
They are both the basis for simple real estate modeling.
NPV: Net Present Value
IRR: Internal Rate of return.
I will be doing threads on these guys in the coming days.
They are both the basis for simple real estate modeling.
8/10/2019 Sixth Day:
Tax Certiorari
It is essentially the legal process of arguing what your building is actually worth vs what the tax collectors say its worth.
This will save you $$$ on your taxes.
I will write a thread on this later in more depth.
Tax Certiorari
It is essentially the legal process of arguing what your building is actually worth vs what the tax collectors say its worth.
This will save you $$$ on your taxes.
I will write a thread on this later in more depth.
8/11/2019 Seventh Day:
1031 Exchange
This is a very important piece of tax code
In short, it allows you to defer your capital gains when you sell a property. But you must buy another similar property within a certain time frame
This is important look it up on Investopedia
1031 Exchange
This is a very important piece of tax code
In short, it allows you to defer your capital gains when you sell a property. But you must buy another similar property within a certain time frame
This is important look it up on Investopedia
8/12/2019 Eighth day
NNN or triple net tenant.
This is a tenant who pays for their CAM (common area maintenance) insurance and taxes.
I structure all my leases like this regardless of the tenant. Costs always rise faster than rent increase
NNN or triple net tenant.
This is a tenant who pays for their CAM (common area maintenance) insurance and taxes.
I structure all my leases like this regardless of the tenant. Costs always rise faster than rent increase
8/13/2019 Ninth Day
Gross Lease: This is a lease where the tenant pays just the rent.
You as the landlord pay all other expenses.
Try to avoid lease like this.
Gross Lease: This is a lease where the tenant pays just the rent.
You as the landlord pay all other expenses.
Try to avoid lease like this.
8/19/2019 Tenth Day
With a little break on Twitter for a building, I just closed on I am back
Vesting: We usually use this when talking about equity. For example, we say my equity will "vest" in this year.
This essentially means when we will receive the equity in our deal.
With a little break on Twitter for a building, I just closed on I am back
Vesting: We usually use this when talking about equity. For example, we say my equity will "vest" in this year.
This essentially means when we will receive the equity in our deal.
8/20/2019 Eleventh Day
Closing costs: These are the costs to actually close the deal
Make sure you include this into your estimates when purchasing a building as it is usually .05% to 1% of the purchase price
It is not an insignificant amount.
Closing costs: These are the costs to actually close the deal
Make sure you include this into your estimates when purchasing a building as it is usually .05% to 1% of the purchase price
It is not an insignificant amount.
8/21/2019 Twelfth Day
Dual Agency: This is when one agent represents both the seller and the buyer.
Escrow: An account where a third party holds the money while the transaction takes place. Usually done for the down payment when purchasing a building.
Dual Agency: This is when one agent represents both the seller and the buyer.
Escrow: An account where a third party holds the money while the transaction takes place. Usually done for the down payment when purchasing a building.
8/22/2019 Thirteenth Day
Title: This is somewhat of a bundle of rights for the person who owns the building. In your due diligence process, you will pull the title to make sure it is clear of any lawsuits.
CAM means common area maintenance. (Incase anyone forgot)
Title: This is somewhat of a bundle of rights for the person who owns the building. In your due diligence process, you will pull the title to make sure it is clear of any lawsuits.
CAM means common area maintenance. (Incase anyone forgot)
8/23/2019 Fourteenth Day
Depreciation: The process of estimating the lifespan of your investment
In real estate depreciation is a deduction off your taxes
Depreciation Schedule:
CRE: 39 years
Rental: 27.5
(If you need to know more google. This is a topic too long for twitter)
Depreciation: The process of estimating the lifespan of your investment
In real estate depreciation is a deduction off your taxes
Depreciation Schedule:
CRE: 39 years
Rental: 27.5
(If you need to know more google. This is a topic too long for twitter)
8/24/2019 Fifteenth Day
Fixed-Rate Loan: The rate is fixed for the period of the loan
Variable Rate Loan: The rate will change at a certain point
Basic concepts yet they are important.
If you want to get into Real Estate it means knowing every nook and cranny of how it works
Fixed-Rate Loan: The rate is fixed for the period of the loan
Variable Rate Loan: The rate will change at a certain point
Basic concepts yet they are important.
If you want to get into Real Estate it means knowing every nook and cranny of how it works
8/25/2019 fifteenth day
TI Bill
Stands for tenant improvement
It's an amount the landlord allots to the tenant to make improvements. Usually done through the lease
Always ask to see the full TI bill when buying a property.
It can skew the lease payments so they are higher
TI Bill
Stands for tenant improvement
It's an amount the landlord allots to the tenant to make improvements. Usually done through the lease
Always ask to see the full TI bill when buying a property.
It can skew the lease payments so they are higher
8/26/2019 Sixteenth Day
Always get multiples of everything.
Get multiple bids for your construction projects.
Multiple term sheets from banks.
Then play them off each other.
Term Sheet: Is the loan terms.
Always get multiples of everything.
Get multiple bids for your construction projects.
Multiple term sheets from banks.
Then play them off each other.
Term Sheet: Is the loan terms.
8/27/2019 Eighteenth Day:
A quick term because I am tired haha.
HOA: Means homeowners association.
The only time you have to deal with this is if you buy a retail condo.
But rethink twice if you are looking to buy because HOA is a pain in the ass and restrictive.
A quick term because I am tired haha.
HOA: Means homeowners association.
The only time you have to deal with this is if you buy a retail condo.
But rethink twice if you are looking to buy because HOA is a pain in the ass and restrictive.
8/28/2019 Ninteenth Day:
DSCR: Debt Service Coverage Ratio
Get used to knowing what this is when talking to lenders.
It is the NOI/Debt Service.
It essentially shows the ability of the investment's cashflows to pay off the debt payment.
DSCR: Debt Service Coverage Ratio
Get used to knowing what this is when talking to lenders.
It is the NOI/Debt Service.
It essentially shows the ability of the investment's cashflows to pay off the debt payment.
8/29/2019 Twentieth Day:
Quick and easy one.
Pro Rata Share: Simply your share of the building. divide your sq ft by the total sq ft of the building and now you have your pro rata share.
Used commonly for splitting up cam expenses.
Quick and easy one.
Pro Rata Share: Simply your share of the building. divide your sq ft by the total sq ft of the building and now you have your pro rata share.
Used commonly for splitting up cam expenses.
8/30/2019 Twenty First Day:
Building Class:
This refers to the desirability of the location, building type, age, and more.
There is Class A, B, C.
It is usually scaling with price and risk. A is more expensive and least risky. C is vice versa
Building Class:
This refers to the desirability of the location, building type, age, and more.
There is Class A, B, C.
It is usually scaling with price and risk. A is more expensive and least risky. C is vice versa
9/3/2019 Twenty Second Day:
Air Rights:
Notably used in New York. Depends on the city but usually refers to the amount of square footage you can build on a property
It depends on the type of zoning as to how much you may build
Air rights can also be sold to adjacent properties
Air Rights:
Notably used in New York. Depends on the city but usually refers to the amount of square footage you can build on a property
It depends on the type of zoning as to how much you may build
Air rights can also be sold to adjacent properties
9/4/2019 Twenty Third Day:
FAR: Floor Area Ratio
This is the relationship between the SQ ft of the building and the SQ feet of the parcel of land its on.
It is typically calculated by dividing sq ft of building by sq ft of the parcel
FAR: Floor Area Ratio
This is the relationship between the SQ ft of the building and the SQ feet of the parcel of land its on.
It is typically calculated by dividing sq ft of building by sq ft of the parcel
9/5/2019 Twenty Fourth Day:
1031 Exchange
This is a section of the tax codes which allows real estate investors to defer their capital gains taxes on the sale of a property.
Essentially you are allowed to sell the property and buy another without paying capital gains.
1031 Exchange
This is a section of the tax codes which allows real estate investors to defer their capital gains taxes on the sale of a property.
Essentially you are allowed to sell the property and buy another without paying capital gains.
9/6/2019 Twenty Fifth Day:
Anchor Tenant:
A major or prime tenant within a multi tenant building.
This usually refers to a tenant that brings in the majority of the revenue or has a strong and stable long term lease.
Essentially a tenant you can count on.
Anchor Tenant:
A major or prime tenant within a multi tenant building.
This usually refers to a tenant that brings in the majority of the revenue or has a strong and stable long term lease.
Essentially a tenant you can count on.
9/8/2019 Twenty Sixth Day:
Mixed Use Building: A building that quite simply is mixed use.
Could be a building with ground floor retail and top floor office.
Or a building with ground floor retail and top floor residential.
I think you get the jist it is pretty simple
Mixed Use Building: A building that quite simply is mixed use.
Could be a building with ground floor retail and top floor office.
Or a building with ground floor retail and top floor residential.
I think you get the jist it is pretty simple
9/9/2019 Twenty Seventh Day:
Bad Boy Carve Outs: Used in CRE nonrecourse loans.
Borrower is only liable if he does something illegal or something written in their signing document.
Read the terms carefully banks add in all sorts of shit these days.
Bad Boy Carve Outs: Used in CRE nonrecourse loans.
Borrower is only liable if he does something illegal or something written in their signing document.
Read the terms carefully banks add in all sorts of shit these days.
9/10/2019 Twenty-Eighth Day
Origination Points:
One point is equal to 1% of the mortgage amount
They are the costs that a lender charges for creating the loan. Usually one or two points
They are also tax-deductible. The deduction is spread out evenly for the life of the loan.
Origination Points:
One point is equal to 1% of the mortgage amount
They are the costs that a lender charges for creating the loan. Usually one or two points
They are also tax-deductible. The deduction is spread out evenly for the life of the loan.
9/11/2019 Twenty-Ninth Day:
Discount Points: They lower your mortgage by a certain percentage.
When you buy these discount points you are essentially paying the interest of your loan in exchange for a lower rate.
Discount Points: They lower your mortgage by a certain percentage.
When you buy these discount points you are essentially paying the interest of your loan in exchange for a lower rate.
9/15/2019 Thirtieth Day:
SubLease: When your original tenant decides to rent out the space that he rents from you.
Usually forbidden in a lease without the express approval of landlord
SubLease: When your original tenant decides to rent out the space that he rents from you.
Usually forbidden in a lease without the express approval of landlord
