The Real Estate Investing Dictionary By Adam Bryan ppt

The Real Estate Investing Dictionary
By Adam Bryan
Smashwords Edition
Copyright 2012 Diamondhead Studios by Adam Bryan
Smashwords Edition, License Notes
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License Notes and Copyright
This book is licensed for your personal enjoyment only. This
book may not be re-sold or given away to other people even
though it may seem tempting at times. If you would like to
share this book with another person, please please please
purchase an additional copy for each person. If you’re
reading this book and did not purchase it, or it was not
purchased for your use only, then please return to
Diamondhead Studios and purchase your own copy. This
book or any portions of it may not be copied without the
consent of the author. Thank you for respecting the hard
work of this author. He really does appreciate it! Thanks!
Before You Begin
Thank you so much for getting The Real Estate Investing
Dictionary by Adam Bryan. You will truly find this resource to
be very helpful and beneficial throughout your real estate
investing endeavors. This dictionary is filled with some of the
most important real estate investing terms that ever

investor must know. Once you go through this dictionary,
you will find you real estate investing knowledge to be above
far. Thank you so much for reading and enjoy!
Adam Bryan
Author
www.RealAdamBryan.com
Plus, once you finish this going through this dictionary, I
encourage you to check out my real estate investing blog,
for investing tips, guides,
and information. Thank you so much and I look forward to
seeing you on the blog!
A
ABSOLUTE DOLLARS: The amount of profit dollars in a
transaction that it notwithstanding of rate of return
ABSOLUTE RETURN: The amount of profit as a percentage of
investment notwithstanding of rate of return. Take the dollar
amount of the investment divide it by the profit. This will
then give you your absolute return as a percentage.
ABSTRACT OF TITLE: Historic summary of all the proceedings
that affect the title of a property
ACCELERATION CLAUSE: A loan provision giving the lender the
right to declare the entire amount immediately due and
payable upon violation of another particular loan provision
ACCRETION: The rights and principles the law uses to deal
with the changes in the size and shape of a land due to
natural causes
ACCRUED INTEREST: Accumulated interest earned or due but
has not yet been paid.
ACRE: A quantity of land equal to 43,560 square feet.
ADDENDUM: Something added as an attachment to a contract

ADJUSTABLE RATE MORTGAGE (ARM): A mortgage in which the
interest changes periodically, according to corresponding
fluctuations in an index.
ADJUSTED COST BASIS: The original cost plus improvements
minus depreciation or cost recovery taken for the property.
ADJUSTED GROSS INCOME: The amount of income you have
which can be taxes. This is your gross income minus any
deductions.
AFTER TAX CASH FLOW: The amount of net cash flow
remaining after any tax deductions
ALIENTATION: To convey or transfer title and possession of a
property
AMORTIZATION: Gradually paying down a loan balance
AMORTIZED LOAN: A loan in which the principal and interest is
payable in monthly or other periodic installments over the
term of the loan.
ANNUAL PERCENTAGE RATE (APR): Rate of interest for a loan
per year including fees and points
ANNUAL PROPERTY OPERATING DATA: Detailed cash flow
analysis of an income property
APPRAISAL: Estimating the value of a property
APPRAISED VALUE: The estimated current worth of a property
APPRAISER: A licensed and/or certified individual who, for a
fee, evaluates a property and estimates the property’s
value.
APPRECIATION: The growth in value of a property.
APPURTENANCE: Anything attached to the land, which
becomes part of the property such as a fence.
ARREARS: The mortgage payment that includes interest from
the prior month

ASKING PRICE: The market price that a property is being
asked for
ASSESSED VALUE: The value placed on a property, normally
used for taxing purposes
ASSESSMENT OF REAL ESTATE: Assessing the value of a
property so that it is taxed properly according to its value
ASSET: Any possession of value.
B
BALANCE SHEET: A financial statement that shows assets,
liabilities, and net worth.
BALOON MORTGAGE: A mortgage loan that requires the
remaining balance to be paid at a specific point in time.
BALLOON PAYMENT: A loan payment that is larger than
normal
BANKRUPTCY: The financial inability to pay one's debts when
it’s due.
BASIC INCOME FORMULA: The calculation used to determine
the net operating income on a property
BEFORE TAX CASH FLOW: The amount of cash flow while also
taking into account any debt services and expenses. This is
the final cash flow amount before taxes are taken out.
BILL OF SALE: The document used to transfer title to personal
property
BLANKET MORTGAGE: One mortgage that covers several
different pieces of real property.
BOND: A securitized I.O.U issued by an entity such as a
municipality, government, or corporation. It is basically a
debt owed to the bondholder for borrowing the entity.
BOUNDS: Boundaries that are natural like trees and artificial
like roads

BROKER: A state licensed agent who acts for property owners
in real estate transactions
BUYDOWN: A payment of discount points in exchange for a
lower interest rate

C
CAP:A provision of an adjustable rate mortgage (ARM) that
can limit how much the interest rate or loan payment can
increase or decrease.
CAP RATE: A percentage that shows how much net operating
income a rental property produces relative to it’s fair market
value or purchase price
CAPITAL: Money used for investing purposes or to create
income.
CAPITAL GAIN: The profit between the total acquisition of cost
and net sales price of a property.
CASH OUT: Cash given to the borrower from the proceeds of a
loan
CASH FLOW: Gross income minus operating income and debt
services. Can be either positive or negative
CASH FLOW STATEMENT: Shows income and expenses from all
sources
CASH OUT REFINANCE: When a borrower refinances his or her
mortgage at a higher amount than the current loan balance
with the intention of pulling out money for personal use,
such as buying another property or other things
CAVEAT EMPTOR: Let the buyer beware.
CERTIFICATE OF ELIGIBILITY: A document issued by the
Veterans Administration (VA) that certifies whether a veteran
is eligible for a VA loan.

CERTIFICATE OF REASONABLE VALUE (CRV): Once the appraisal
has been performed on a property being bought with a VA
loan, the Veterans Administration issues a certificate of
reasonable value.
CHATTEL: Personal property.
CHATTEL MORTGAGE: The mortgage on personal property.
CLEAR TITLE: A title that is free of any liens or legal questions
as to ownership of the property.
CLOSING- The formal meeting where loan documents are
signed and funds are paid.
CLOSING COSTS: The expenses that borrowers incur to fully
complete the loan transaction such as title searches, title
insurance, closing fees, recording fees, and processing fees.
CLOSING DATE: A predetermined date, agreed to by both the
buyer and the seller, that the transaction of buying/selling
property will take place.
COLLATERAL: Properties or assets pledged to secure a debt in
case the borrower cannot repay what was borrowed
COMMISSION: A percentage of the purchase price paid to the
real estate broker or agent for their services.
COMPARABLE MARKET ANALYSIS (CMA): The estimate of fair
market value that is determined by comparing the subject
property with other comparable properties in the local area.
CONCESSIONS: During negotiations, these are the items that
each party is willing to give up in order to get the items each
party really wants and come to an agreement
CONDOMINIUM CONVERSION: Changing the ownership of an
existing building, such as a rental property to the
condominium form of ownership. Converting from an
apartment to a condominium.

CONSIDERATION: Anything of value given as an incentive to
enter a contract.
CONSUMER PRICE INDEX (CPI): A measure of the average
change in price, over time, of basic goods and services
compiled and reported by the Bureau of Labor Statistics of
the Department of Labor.
CONTINGENCY: A condition that must be met before the
contract is legally binding
CONTRACT: A legal agreement entered into by two or more
parties that create an agreement to do or not to do certain
things
CONVENTIONAL MORTGAGE: Home loans other than
government loans (VA and FHA).
CONVERTABLE ARM: An adjustable rate mortgage (ARM) that
allows the borrower to change the ARM to a fixed-rate
mortgage within a specific time.
CONVEY: To deed or transfer title from one person to another
COOPERATIVE: A form of ownership in which a corporation
usually owns the building and land. The individual residents
own the stock of the corporation and have a proprietary
lease in a unit or apartment.
COUNTEROFFER: The rejection of an offer to buy or sell, with a
simultaneous substitute offer.
CREDIT LIMIT: The maximum amount someone can charge to
a credit card.
CREDITOR: The lender, also known as the person to whom the
debt is owed.
CREDIT RATING: The evaluation of person's debt repayment
history.
CREDIT REPORT: A document that summarizes an person’s

credit history.
CREDIT SCORE: Scores that predict the likelihood that you will
payback the money you borrowed
D
DEAD ASSET: An asset that an investor does not want mainly
because it has limited value
DEBT CONSOLIDATION: The process where all monthly debt
payments are combined into one single debt and payment
DEBT SERVICE: Sum of the annual principal and interest
payments made on a loan.
DEBT TO INCOME RATIO: The ratio between the monthly
payments on all debt to the gross monthly income of a
property
DEED: A written document that conveys title to real property
DEED IN LIEU OF FORECLOSURE: Giving property back to the
lender without foreclosure
DEED OF TRUST: An instrument by which a borrower transfers
title to a third party or trustee as security for a debt. The
beneficiary of the trust is normally the lender.
DEFAULT: Failure to meet all the commitments and
obligations specified in the mortgage or deed of trusts.
DEFLATION: When the amount of money in circulation
decreases relative to the supply of a good or service
DEPRECIATION: When the value of a property reduces
DEPRECIABLE BASIS: The amount of the cost of a depreciable
asset like a rental property to which the depreciation
schedule is applied to.
DISTRESSED PROPERTY: A property that is prices well below it’s
market value after renovation
DOWN PAYMENT: A percentage of the purchase price of a

property that the buyer pays in cash and does not finance
with a mortgage.
DUE ON SALE CLAUSE: When the loan is due upon the sale of
the property
DUPLEX: A two unit home where the units share a common
wall and are usually side by side
E
EARNEST MONEY: A deposit of money given by a party to bind
the contract, which is usually credited toward the sales price.
EASEMENT: An interest held by one party in the real property
of another, giving that person the legal right to trespass on
the other's property.
EFFECTIVE INTEREST RATE: The interest rate the borrower
actually pays as opposed to the nominal interest rate.
ENCUMBRANCE: A limitation on the title to real property.
EQUAL CREDIT OPPORTUNITY ACT (ECOA): A federal law that
requires lenders and other creditors to make credit equally
available without discrimination based on race, color,
religion, national origin, age, sex, marital status, or receipt of
income from U.S. public assistance programs.
EQUITY: The money value of a property or of an interest in a
property in excess of any claims or liens against it
EQUITY PARTNER: A co-investor who shares the risk and
reward of ownership of a property
EQUITY OF REDEMPTION: The right of a borrower to buy back a
property after a foreclosure sale
ESCAPE CLAUSE: A clause added to the contract that gives the
party an option of exiting the contract, with no further
contractual obligations.
ESCROW: Money or documents held by a neutral third party.

ESCROW ACCOUNT: An account from which funds can be
disbursed only for specified reasons
ESTATE: Ownership interest in real property.
ESTATE BY THE ENTIRETIES: Ownership by husband and wife
with the right of survivorship.
ESTIMATED ANNUAL GROSS INCOME: The estimate of the total
amount of income one will receive in a period of one year.
ESTOPPEL LETTER: A letter certifying the exact balance of a
mortgage or another loanat a certain time
ET AL: And others.
ET UX: And wife.
EVICTION: The lawful eviction of an occupant from real estate
property.
EXCLUSIVE RIGHT TO SELL: A relationship between an agent
and his or her principal wherein the agent gets a commission
regardless of who sells the property.
EXCULPATORY CLAUSE: Provisions in a mortgage allowing the
borrower to surrender the property to the lender without any
personal liability
EXPENSES: The costs of maintenance, repairs, insurance,
taxes, management, and other rental costs.
EXTENSION CLAUSE: A clause in a contract that lists the terms
under which an agreement can be extended.
F
FACE VALUE: The dollar amount shown by words or numbers
on a document
FAIR MARKET VALUE: The highest estimated price in which a
property would be able to be sold at
FANNIE MAE (FNMA): The Federal National Mortgage
Association is a congressionally chartered, shareholder-

owned company that is the nation's largest supplier of home
mortgage funds.
FEDERAL HOUSING ADMINISTRATION (FHA): An agency of the
U.S. Department of Housing and Urban Development (HUD)
whose main activity is insuring that residential mortgage
loans made by private lenders. The FHA also sets standards
for construction and underwriting but does not lend money
or plan or construct any housing.
FINANCIAL ANALYSIS: The determined value of a property
based on income and expenses.
FINANCIAL LEVERAGE: The use of other peoples' money (OPM)
for investment purposes.
FINANCING: How an investor obtains the capital to purchase a
property.
FIRST DEED OF TRUST: First mortgage
FIXED-RATE MORTGAGE: A mortgage in which the interest rate
does not change during the entire term of the loan.
FLEXIBLE SELLER: A seller who is willing to sell property in a
nontraditional manner.
FLIPPING: The rapid turnover of property. An investor buys a
property and immediately sells it for a profit, usually after
renovations and improvements to increase its value
FORCED EQUITY: The equity an investor receives from
proactive adding new developments to the property as
opposed to waiting for the property to appreciate
FOUND EQUITY: The equity an investor receives when they
first buy a property
FORECLOSURE: The process where property pledged as
security on a note is sold under court order because of
default on the note such as failure to pay the mortgage

FRBO: For rent by owner
G
GAIN: An increase in money or property value
GOVERNMENT LOAN: A mortgage that is insured by the
Federal Housing Administration (FHA) or guaranteed by the
Department of Veterans Affairs (VA) or the Rural Housing
Service (RHS).
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GINNIE MAE):
A government owned corporation within the U.S. Department
of Housing and Urban Development (HUD) that provides
funds to lenders for making home loans.
GRANTEE: A person that obtains the title to real property by
deed.
GRANTOR: One who conveys the title to property by deed.
GROSS INCOME: The total income from a property before the
deducting any expenses.
GROSS MONTHLY INCOME: The amount earned per month
before any deductions
GROSS SCHEDULED INCOME: The amount of income a rental
property is capable of bringing in if it is fully rent and does
not have any vacancies. It’s the maximum potential income
a property can produce
GROUND LEASE: Leasing the ground only
H
HARD MONEY: Funds and money that is obtained from private
lenders. Hard money tends to have higher fees and interest
rates.
HEREDITAMENT: Personal or real property that can be
inherited
HOME EQUITY LINE OF CREDIT: A mortgage loan that allows the

borrower to obtain cash drawn against the equity of his or
her home, up to a predetermined amount.
HOME INSPECTION: Inspecting a house to evaluate the
structural and mechanical condition of the property. Usually
done by a professional.
HOMEOWNER'S ASSOCIATION: A nonprofit association that
manages the common areas of a planned unit development
(PUD) or condominium project.
HOMEOWNER'S INSURANCE: Insurance coverage that
compensates for any physical damage to a property from
any hazards such as fire, wind, vandalism, etc.
HOMEOWNER'S WARRANTY: Insurance that covers repairs to
certain items, such as heating or air conditioning
HOUSING AND URBAN DEVELOPMENT (HUD): A government
agency that is a fantastic source for real estate statistics.
Can be found at www.hud.gov
HUD MEDIAN INCOME: The median family income for a
particular county or metropolitan statistical area (MSA), as
estimated by the Department of Housing and Urban
Development (HUD).
I
IDLE EQUITY: A property that makes little to no contribution in
cash flow
IMDENIFY: Protecting a person in the even of a loss or
damage
INDEMNIFICATION: Compensating another person in the event
of a loss.
INDENTURE: A contract.
INSTALLMENT LOAN: A loan that must be repaid in two or
more payments.

INSTANT EQUITY: The difference between the property's value
and what you paid for it at the time of purchase.
INTEREST RATE: An amount of money that a borrower must
repay in addition to the full amount of the loan.
INVOLUNTARY LIEN: A lien, like real property tax liens, which
are recorded against a property without the consent of the
owner.
J
JOINTLY AND SEVERALLY LIABILITY: A creditor can demand full
repayment from any of those who have borrowed and each
borrower is liable for the full debt
JOINT VENTURE: An agreement between two or more parties
who invest in a single property.
JUDICIAL FORECLOSURE: A foreclosure ordered by a court of
jurisdiction.
JUMBO LOAN: A loan that exceeds conventional conforming
loan limits which is set at $625,500
JUNIOR MORTGAGE: A mortgage whose claim against the
property will be satisfied only after prior mortgages have
already been repaid.
K
KICKER: A payment required by the mortgage in addition to
the normal principle and interest
L
LEASE: A contractual agreement between the landlord
(lessor) and the tenant (lessee) that allows the tenant to use
and occupy the property for a specified period of time.
LEASEHOLD: The estate in which a tenant has a lease
LEASE OPTION
A lease combined with an option agreement that gives the

tenant the right to purchase the property under some
specified conditions
LESSEE: Someone who rents a property from a landlord, also
know as a tenant
LESSOR: Someone who rents out a property, also known as a
landlord.
LET: To rent a property to a tenant
LEVERAGE: The use of borrowed money to finance
investments. OPM can also be as leverage
LIABILITIES: Your financial obligations.
LIEN: The right to retain possession of another person’s
property pending their discharge of debt.
LIFE TENANT: Someone who can stay in a property for life
LIMITED LIABILITY COMPANY: A form of company that has
characteristics of both a partnership and a corporation.
Investment homes are sometimes turned into LLC’s because
it is used to protect assets.
LIMITED PARTNERSHIP: A form of business in which one
partner has more responsibility and power than another. If
you are a limited partner, chances are that you don’t have
the power to make any major decisions.
LINE OF CREDIT: An agreement by a commercial bank or other
financial institution to extend credit up to a certain amount
for a certain time to a specified borrower.
LIQUID ASSET: A cash asset or asset that can quickly be
converted into cash
LIQUIDATED DAMAGES: An amount agreed upon in a contract
that one part will pay the other in the even of a breach of
contract of some sort.
LIS PENDENS OR NOTICE OF: A notice given to the public

warning them that legal action is being taken that will affect
title or possession of a specific property.
LISTING: When a seller signs a contract with a real estate
broker to market the seller’s property. Also known as listing
agreement or an exclusive right to sell.
LISTING AGREEMENT: A contract between a seller and a real
estate broker that allows the broker to find a buyer for the
property.
LISTING BROKER: A broker who works with a seller to list a
home and sell it. The broker will then take a commission
from the sale
LOAN: A sum of borrowed money that is repaid with interest.
LOAN APPLICATION (1003): A loan application that is standard
for conforming loans. This is the standard application for
most residential loans
LOAN TO VALUE (LTV): The percentage relationship between
the amount of the loan and the appraised value or sales
price. Basically, it the percentage of debt relative to the
property’s purchase price.