Real Estate Investor Terminology Part 2

• After Repair Value: The after repair value describes an estimate of a property’s value, after repairs and renovations have been made. As a part of deal analysis, real estate investors utilize this calculation to determine the profit potential of a renovation property.

• Inspection: A property inspection is an examination through which the condition of a property is determined. Inspections can help interested buyers estimate the costs of making repairs and renovations.

• Flipping: In real estate, flipping houses describes the strategy of purchasing a property, making improvements to it, and then putting it back on the market for a profit.

• BRRRR: An investing acronym that stands for buy, rehab, rent, refinance and repeat, BRRR describes a framework where investors build passive income over time.

• Distressed Property: A property becomes distressed when a homeowner defaults on their mortgage payments, is delinquent on paying property taxes, or is condemned due to disrepair.

• Foreclosure: When a bank repossesses a property due to the owner’s inability to make mortgage payments.

• Short Sale: When a homeowner’s outstanding mortgage exceeds the home’s current value, they can obtain approval from their lender to list the property at a lower price. This type of sale is referred to as a short sale.