When you start studying a new subject, there is always going to be a learning curve. The same is true with learning the real estate investing industry, especially in the beginning. You will be gaining new information on a daily basis, and hearing many new terms in the process. I have put together a list of some of the most common terms used in real estate investing:
A foreclosure is when the bank legally takes ownership of a property because the owner has defaulted on making the payments. Bank will sell the property at a foreclosure auction, and if it doesn’t sell it becomes the property of the bank. Investing in pre-foreclosure and foreclosure properties can make some of the best investments and I teach the proven methods I have developed in Foreclosure Investing Mastery course.
A short sale is a process of selling a home for less than is owed on the mortgage. The lender must approve the short sale amount. A short sale is sometimes attempted before a property goes into foreclosure.
Fair Market Value (FMV)
Fair Market Value is what a property is estimated to be worth taking into account comparable properties, market factors, the condition of the home and more. The ProfitGrabber Pro system can help you determine the FMV in just minutes.
Wholesaling a property is one of the exit strategies I teach. It is when you enter into a contract with a motivated seller to purchase their property for a certain price, and in turn, you market the property to buyers who can close quickly. You essentially “introduce” that buyer with the seller and make a profit based on the difference between the difference between the amount you have contracted with the seller and the amount the buyer pays.
Due diligence is done after you have a signed Purchase and Sale Agreement. It is an integral step to take to ensure that the deal will be profitable. During due diligence you confirm the FMV, get a home inspection and check the title, among other things.
The comparisons of homes that recently sold that are similar in size and location to the property you are hoping to invest in. This figure helps determine the FMV.
Purchase and Sale Agreement (PSA)
A PSA is a legal contract between the buyer and the seller that outlines all of the details of the deal including the obligations of each party.
A deed is a legal document where the property ownership is transferred from one person or company to another person. When recorded at the county recorder, the deed shows the current ownership of the property.
In your quest to become a successful real estate investor, you will be learning new information every day. I recommend going through my online and in-person workshops to learn the most effective strategies for becoming a successful real estate investor.