Glossary
2,204 terms. Zero jargon.
From ROI to Cap Rate — clear definitions with practical examples for every phase of your investing journey.
From ROI to Cap Rate — clear definitions with practical examples for every phase of your investing journey.
The $25,000 rental loss allowance is an IRS exception that lets "active participants" in rental real estate deduct up to $25,000 of rental losses against their non-passive income (W-2, business income) each year — a carve-out from the usual passive loss rules that would otherwise suspend those losses.
Monthly rent should hit at least 1% of what you paid. That's the 1% rule. A $185,000 house? $1,850/month or more. Quick screen — not a full analysis.
10-Year Wealth Plan is a financial strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of rental strategy buy and hold deals.
A 1031 exchange (IRC Section 1031) lets you sell an investment property and defer capital gains and depreciation recapture by reinvesting the proceeds into a like-kind replacement property of equal or greater value, using a Qualified Intermediary to hold the funds.
1031 Exchange Advisor is a tax strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of building your team deals.
The 1031 exchange deadline comprises two critical timeframes: 45 days from the sale of your relinquished property to identify replacement properties, and 180 days to close on those replacements — missing either deadline disqualifies the exchange and triggers full capital gains taxes.
ADA Compliance is a legal strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of value add renovations deals.
ADA Compliance (PM) is a legal strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of property management deals.
An ADU scale strategy is a portfolio growth approach that increases door count by building accessory dwelling units (ADUs) on existing properties rather than acquiring new ones, adding rental income without additional land purchases.
AFFO (Adjusted FFO) is a financial analysis concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of passive real estate investing deals.
AGI (Adjusted Gross Income) is a tax strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of tax optimization deals.
Airbnb is the world's largest short-term rental marketplace, connecting hosts who rent properties by the night or week with guests seeking vacation and business stays.
BiggerPockets is a foundational investing concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of real estate investing deals.
A real estate investment strategy — Buy, Rehab, Rent, Refinance, Repeat — that lets investors recycle capital across multiple properties by forcing equity through renovation and extracting it through refinancing.
BRRRR Case Study is a investment strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of brrrr strategy deals.
BRRRR Deal Criteria is a deal evaluation concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of brrrr strategy deals.
BRRRR Exit Strategy is a investment strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of brrrr strategy deals.
The BRRRR Method is a five-step real estate strategy—Buy, Rehab, Rent, Refinance, Repeat—that lets you recover your initial capital through a cash-out refinance after adding value, then redeploy it into the next deal.
C Corporation is a legal strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of legal protection asset structuring deals.
Cap rate analysis is the process of estimating or verifying a property's capitalization rate using NOI and comparable sales to value the deal and compare it to market.
Cap Rate Compression is a financial analysis concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of real estate investing deals.
CapEx Reserve is a financial strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of deal analysis deals.
Class A property is the highest tier in the real estate classification system — newest construction (typically within 10–15 years), best locations, highest-quality finishes, lowest vacancy rates, and lowest cap rates (often 4–5%).
Class B property is the middle tier — typically 15–30 years old, good but not premium locations, solid operating expenses, moderate cap rates (5–7%), and a reliable working-class tenant base that many investors call the "sweet spot."
A ratio that measures whether a rental property's income covers its debt payments — calculated by dividing rental income by total debt service (PITIA), where 1.0 means breakeven and 1.25+ means strong cash flow.
Depreciation is the IRS allowance that lets you deduct a rental property's building cost (minus land) over 27.5 years — a non-cash expense that lowers taxable income even when the property appreciates.
Disparate Impact is a legal strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of tenant screening system deals.
Disposition is a investment strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of syndication deals.
Disposition of Passive Activity is a tax strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of tax optimization deals.
Distribution Frequency is a financial strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of syndication deals.
Electrical Panel Upgrade is a construction and renovation concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of value add renovations deals.
Electrical Rough-In is a construction and renovation concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of value add renovations deals.
Electrical Upgrade is a construction and renovation concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of value add renovations deals.
Electrician is a construction and renovation concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of building your team deals.
Emergency Contact is a property management concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of property management deals.
Emergency Fund is a financial strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of real estate investing deals.
Facebook Marketplace (Rentals) is a property management concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of property management deals.
Fed Pivot is a economic fundamentals concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of market cycles deals.
A feeder fund is an investment vehicle that pools capital from investors and channels it into a larger master fund. The master fund holds the actual assets and executes the strategy. You invest in the feeder; the feeder invests in the master. You get the same exposure, but the structure lets the sponsor serve different investor types — U.S. taxable, offshore, tax-exempt — through separate feeders.
FEMA Flood Map is a market analysis concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of market research location analysis deals.
Fence is a construction and renovation concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of fix and flip deals.
FFO (Funds From Operations) is a financial analysis concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of passive real estate investing deals.
Gain to Lease is a financial analysis concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of small multifamily investing deals.
Gap Funding is a real estate financing concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of financing deals.
A garage conversion is the process of converting an existing garage into a habitable living space—typically an ADU, in-law suite, or additional bedroom—with proper insulation, HVAC, plumbing, and electrical.
Garage Door is a construction and renovation concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of fix and flip deals.
A garden apartment is a low-rise multifamily building—typically 1–3 stories—with units that have direct or near-direct ground access, often with patios or small yards, common in suburban and secondary markets.
GC Markup is the percentage a general contractor adds to subcontractor and material costs to cover their overhead (office, insurance, vehicles, staff) and profit, typically ranging from 15-25% of total project cost for residential renovation projects.
A revolving credit line secured by your property's equity. You draw when you need it and pay interest only on what you've borrowed—like a credit card backed by your home.
House Hack Cash Flow is a financial analysis concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of house hacking deals.
House Hack Single-Family is a property classification concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of house hacking deals.
HUD-1 Settlement Statement is a title and closing concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of purchase process deals.
An HVAC upgrade is the replacement or major improvement of a property's heating, ventilation, and air conditioning system—typically when the existing unit is near end-of-life or when repair costs exceed 50% of replacement cost.
Insurance Rider is a real estate insurance concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of legal protection asset structuring deals.
IRA Custodian is a tax strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of passive real estate investing deals.
K-1 (Schedule K-1) is a tax strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of syndication deals.
KPI (Key Performance Indicator) is a financial analysis concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of real estate investing deals.
Licensed Surveyor is a construction and renovation concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of building your team deals.
Live-In Requirement is a real estate financing concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of house hacking deals.
Living Trust is a legal strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of legal protection asset structuring deals.
LLC annual compliance refers to the ongoing legal, financial, and administrative requirements that LLC owners must fulfill each year to keep their entities in good standing—including annual reports, franchise taxes, registered agent maintenance, and record-keeping.
Load-Bearing Wall is a construction and renovation concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of value add renovations deals.
Loan Assumption is a real estate financing concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of financing deals.
MACRS (Modified Accelerated Cost Recovery System) is the IRS depreciation system for all rental property — it defines recovery periods (27.5 years for residential, 39 for commercial), conventions (half-year, mid-month), and how cost segregation reclassifies components into shorter lives to accelerate deductions.
The MLS (Multiple Listing Service) is a regional database of properties listed for sale by licensed agents, sharing listing data among brokers to maximize exposure and facilitate sales.
The MLS vs Off-MLS Strategy compares two deal-sourcing approaches: buying properties listed on the Multiple Listing Service (MLS) where all agents and buyers can see them, versus finding off-market deals through direct outreach, networking, and other channels where competition is minimal.
The MST framework is a three-part model for real estate success: Mindset (beliefs and risk tolerance), Skillset (analysis, negotiation, operations), and Toolset (spreadsheets, MLS, pro forma models).
NAV (Net Asset Value) is a financial analysis concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of passive real estate investing deals.
An NNN (triple-net) lease is a commercial lease where the tenant pays property taxes, insurance, and maintenance — the three "nets" — in addition to base rent. You collect rent and pass those costs through.
NOI (net operating income) is what a property earns from operations each year. Rental revenue minus vacancy loss and operating expenses. Before you subtract the mortgage, CapEx, or taxes.
ONE Thing Focus is the investing principle of selecting a single real estate strategy — such as buy-and-hold SFRs, house hacking, or small multifamily — and pursuing it exclusively until you've closed 3-5 deals, before considering diversification into other strategies.
OPM (Other People's Money) is borrowed or invested capital from third parties—banks, hard money lenders, private money lenders, seller-carryback, or syndication investors—used to acquire and operate real estate instead of your own cash.
PadSplit is a property classification concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of portfolio scaling 1031 exchanges deals.
Payment Standard is a market analysis concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of rental strategy buy and hold deals.
PCE (Personal Consumption Expenditure) is a economic fundamentals concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of market cycles deals.
The peak phase is the top of the real estate cycle—maximum cap-rate compression, overheated demand-drivers, sellers-market extremes—preceding contraction-phase and market-correction.
Peak season is the period of highest short-term-rental demand in a given market—when ADR and occupancy-rate reach their maximum, driven by seasonality, weather, or events.
Pending Home Sales is a market analysis concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of market cycles deals.
The QBI deduction allows owners of pass-through entities and rental properties to deduct up to 20% of their qualified business income from federal taxable income under Section 199A of the Internal Revenue Code.
The QMI play is an investment strategy that targets builder quick move-in homes—completed or near-completion spec inventory—purchased at 5-10% discounts to capture instant equity and immediate rental income with no construction wait.
Qualified Business Income (QBI) is a tax strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of tax optimization deals.
Qualified Intermediary is a tax strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of portfolio scaling 1031 exchanges deals.
Qualified Intermediary (1031) is a tax strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of passive real estate investing deals.
Qualified Mortgage (QM) is a real estate lending concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of financing deals.
Cash-Out Refi Process is a real estate financing concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of financing deals.
Radon is a legal strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of value add renovations deals.
Rate Cap is a real estate lending concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of real estate investing deals.
A rate lock is an agreement with a lender to freeze the mortgage-rate for a set period—typically 30–60 days—protecting the borrower from mortgage-rate increases before closing when interest-rate-cycle or federal-funds-rate is rising.
A rate-and-term refinance replaces your existing mortgage with a new one that changes the interest rate or loan term—but not the principal balance—and does not provide cash to the borrower.
A real estate agent is a licensed professional who represents buyers or sellers in property transactions, with access to the MLS, market data, and negotiation expertise.
S Corporation is a legal strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of legal protection asset structuring deals.
S-Corp Election is a legal strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of legal protection asset structuring deals.
The S-Corp tax election strategy involves electing S-Corporation tax status for your real estate holding entity to potentially reduce self-employment taxes on property management income and active real estate business income — saving $5,000-$15,000 annually.
Safe Harbor is a tax strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of tax optimization deals.
Safe Harbor Election is a tax strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of tax optimization deals.
Safe Withdrawal Rate is a financial strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of real estate investing deals.
Tag-Along Rights is a legal strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of syndication deals.
Takeout Financing is a real estate lending concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of financing deals.
Tankless Water Heater is a construction and renovation concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of value add renovations deals.
Tap Fee is a legal strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of legal protection asset structuring deals.
Target Market is a market analysis concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of real estate investing deals.
Tax Assessed Value is a tax strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of first rental property deals.
UBIA (Unadjusted Basis of Qualified Property) is a tax strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of tax optimization deals.
UBIT (Unrelated Business Income Tax) is the tax the IRS levies on income from an active trade or business — or from debt-financed property — held inside a tax-advantaged account like an IRA or 401(k).
Umbrella Insurance is a real estate insurance concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of legal protection asset structuring deals.
Unauthorized Occupant is a property management concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of property management deals.
Under-Improvement is a construction and renovation concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of value add renovations deals.
An underperforming property is one selling below market value because of poor condition, financial distress, or owner motivation. It's the value-add opportunity — buy low, fix it, and capture forced appreciation.
A government-backed loan for eligible veterans and service members, offering no down payment and favorable terms for primary residence purchases.
Vacancy Marketing is a property management concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of property management deals.
Vacancy Turnover is a property management concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of property management deals.
A vacation rental is a property rented for short stays—typically 1–30 nights—to travelers and vacationers, often via Airbnb, Vrbo, or direct booking, as opposed to long-term rental property with 12-month leases.
Value Creation is a investment strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of portfolio scaling 1031 exchanges deals.
Value engineering is the practice of maximizing the return on renovation dollars by choosing improvements that add the most value per dollar spent—without sacrificing quality or rentability.
W-2 Income is a tax strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of tax optimization deals.
W-2 tax offset is the strategy of using rental property depreciation and passive losses to reduce the taxes owed on employment income — achievable through the $25,000 passive loss allowance, Real Estate Professional Status, or the short-term rental loophole.
W-2 Wages Test is a tax strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of tax optimization deals.
WACC (Weighted Average Cost of Capital) is a deal evaluation concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of deal analysis deals.
Wage Garnishment is a legal strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of tenant screening system deals.
Wage Growth is a economic fundamentals concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of market cycles deals.
X-Flood Zone is a FEMA designation indicating an area with minimal to moderate flood risk, where flood insurance is not required by lenders but may still be worth carrying.
X-out pricing is an underwriting technique that works backwards from your target exit cap rate and desired return to calculate the maximum price you should pay for a property.
An XBRL filing is a machine-readable financial report submitted to the SEC where every line item is tagged with a standardized label, making it possible to extract and compare REIT financial data automatically.
XIRR is a return metric that calculates your annualized rate of return using the actual dates of each cash flow, rather than assuming equal time intervals like standard IRR.
Yard Sign is a property management concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of property management deals.
The yield curve plots interest rates (yields) on bonds of the same credit quality across different maturities—typically Treasury securities—with inversion (short rates above long rates) often preceding recession by 12–18 months as a leading-indicators.
Yield Maintenance is a real estate lending concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of financing deals.
Yield Spread is a economic fundamentals concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of market cycles deals.
YieldStreet is a investment strategy concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of passive real estate investing deals.
YIMBY is a economic fundamentals concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of market cycles deals.
Zillow is a market analysis concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of market research location analysis deals.
Zillow Home Value Index (ZHVI) is a economic fundamentals concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of market cycles deals.
Zillow Rental Listing is a property management concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of property management deals.
A zoning variance is a formal exception to the local zoning code—allowing a use or dimension that would otherwise be prohibited. You apply to the zoning board; approval isn't guaranteed.