In any new endeavor, one must become a student to their field of study. Similarly, the real estate
wanna-be novice must put time and effort into educating themselves on the intricacies of the industry before expecting successful results. So, first things first…
…. learn the lingo.
Here are a few of most frequently used abbreviations and terms you hear in the real estate world and may see here on
The Inspiring Investment:
1 ARV – The After-Repair Value is an estimated value of a property after renovations. This value is based a comparative market analysis of similar homes within a certain radius or area of the subject property
2 Subject Property – the property which you are intending to purchase or are gathering date on.
3 CO – A Certificate of Occupancy is a document provided by the city that declares a property safe to be lived in. This is required before closing on a house where permits have been pulled, such as a large renovation or a new build.
4 CMA – A Comparative Market Analysis is a comprehensive way to determine the value of a house you intend to buy or sell. Many things are considered in this analysis including improvements or renovations, square footage, proximity to the subject property, neighborhood, style of house, ect.
5 COF – The Cost of Funds for an investor means the interest paid to an individual or company who is lending them money to do a project.
6 FMV – Fair Market Value is the selling price for a house to which a buyer and seller can agree.
7 Cashflow – the money you get in rent each month over expenses for the property including taxes, repairs, vacancies, insurance and HOA fees.
8 FSBO – Many people attempt to list their home For Sale by Owner to avoid realtor fees.
9 JV – Joint Venture is way to structure a partnership – an agreement between two entities going into a project.
10 LP – A Lease [to purchase] Option is an option a buyer may want or a seller may offer where a potential buyer may rent a property from the owner and a certain portion of their rent goes towards the purchase price.
11 LLC – A Limited Liability Company one of the common ways to structure a real estate business. Wikipedia defines it as, “a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.”
12 OO – Owner Occupied is a description of a property, usually a distressed property, when the owner is still living there.
13 O/F – Owner Financing is one of the ways a sale can be structured so the seller of a property is earning interest by financingthe property to a buyer.
14 REI – Real Estate Investing
15 ROI – For the lender, a Return on Investment is seen as the interest rate earned in lending monies to fund a project.
16 SFR – Single Family Residence is a house that is detatched – not a multi-family, townhome, or cond0.
17 MLS – A more widely understood acronym, the Multiple Listing Service provides a place for the public to list their home for sale on the retail market.
If you are an aspiring real estate investor in the Raleigh and surroudning areas and want to learn more, there is a ton of information out there – for free! Bigger Pockets is a real estate forum where investors come together to network and share their knowledge on flips, buy and holds, wholesaling and much more…
For those of you who don’t have time to learn all this stuff, but the idea of getting into investing sounds good, hop on over to our “Partner with us” page to find out what that might look like. It’s probably going to be a better ROI than your savings account is getting you.
Until Next time…