If you’re thinking about investing in real estate, it’s essential to learn the lingo! In this first part of our three-part series, you’ll learn 40 of the most important terms beginning with the letter A-E that every real estate investor should know. So, keep reading to increase your real estate investing vocabulary and be sure to bookmark this page so you can refer back to it in the future. Let’s get started!
Glossary of Real Estate Investing Terms A-F
1. Absentee Owner
An absentee owner is an individual who owns a property but does not live in it or manage it directly. Real estate investors often market to absentee owners because they may be more willing to sell their property for a lower price than someone directly involved in its upkeep.
2. AccuTXT Text Response System
AccuTxt is the first and only reverse texting technology offered by REIPrintMail that helps real estate investors overcome seller hesitation in responding to direct mail ads. This technology can boost response rates by up to 25% by making it easier for sellers to respond to your marketing.
With AccuTxt, once your prospect responds, they’ll receive an automatically generated message (for instance: thanks for texting, I’ll reach out soon!). You will also be sent an email that includes their property details as well as the new cell phone number captured. You can view the demo of how AccuTxt works here.
3. AccuPix Mailers
AccuPix mailers are a type of custom mailer offered by REIPrintMail. These are an excellent way to capture a seller’s attention. With AccuPix, your prospects receive a custom mailer with a large image of their actual house, satellite view, or street view (sourced from Google Maps). This easy customization allows your marketing message to stand out among the other “generic” mail they’ll receive.
Thanks to REIPrintMail’s partnership with Google, this highly personalized look is completely automated and requires no extra work (or setup) on your part. You can view a demo video of this mailer here.
4. Active Investor
An active investor is someone who actively manages their investment properties. This can include finding and screening tenants, maintaining the property, and handling repairs and renovations. Active investors typically have a portfolio of multiple properties and may hire a property management company to help with the day-to-day tasks.
5. After Repair Value (ARV)
The After Repair Value is the estimated value of a property after all repairs and renovations have been completed. This is an important number for fix-and-flip investors to calculate because it helps them determine how much they can spend on repairs without exceeding the property’s potential value.
6. Appraisal
An appraisal is a professional assessment of the value of a piece of real estate. Appraisals are typically conducted by licensed appraisers and are used to determine the fair market value of a property.
7. “As Is”
“As is” is a term used to describe a property that’s being sold in its current condition without any repairs or improvements. This is typically the case with most investment property purchases and nearly always the case for foreclosed properties or short sales. When considering an “as is” property, it’s essential to factor in the cost of any necessary repairs before making an offer.
8. Automation
Automation is the use of technology to streamline processes and reduce manual labor. In real estate investing, automation can be used in several ways, from automated lead follow-up systems to automated marketing campaigns. The more you can automate, the more time you’ll have to spend talking to motivated sellers and closing deals.
9. “Back Office” or “Back-End Team”
The back office or back-end team is the support staff that helps an organization run smoothly. In the real estate investing context, this team might include accountants, administrative assistants, virtual assistants, and marketing and lead generation teams.
A great example of a back-end team is REIComplete. We offer investors a “complete” backend team for their lead generation, lead management, CRM management, multi-channel (phone, text, email) follow-up, and appointment-setting needs. This enables investors to spend less time doing all the back-end grunt work and more time closing deals and growing their businesses.
Want to learn more about how we can help free up your time by handling all of the back-end tasks for you so you can focus on closing more deals (and enjoying your life)? Schedule a free discovery call with us to learn more about our complete solution.
10. Bandit Signs (Also Called Yard Signs)
Bandit signs are a popular brand name of yard signs. Real estate investors will often place these yard signs on properties, along busy roadways, or at strategic street corners to generate motivated seller leads. These signs usually have the investor’s contact information and a brief message, such as “We Buy Houses” or “Cash for Homes” along with the investor’s contact information. Bandit signs are a controversial marketing tactic, but they can effectively generate leads cheaply when used correctly. Just be sure to research your local regulations first to ensure you’re following all city ordinances.
11. Bank-Owned Property (REO)
A bank-owned property, also known as an REO (real estate owned), is a property that has been foreclosed on and repossessed by the lender. These properties are typically sold at a discount, making them attractive to investors.
12. Bird Dogs
Bird dogs are individuals who help investors find properties to invest in. They typically receive a commission (known as a “finder’s fee”) for each property they help an investor purchase.
13. Blind Offer
A blind offer is an offer made on a property without the investor ever seeing it in person. This type of offer is often made by investors purchasing properties sight unseen, such as through an auction.
14. Bridge Loan
A bridge loan is a type of short-term loan that is used to bridge the financing gap between the sale of one property and the acquisition of another one. Bridge loans are often utilized by investors who are either in the process of flipping properties or who need the proceeds from the sale of one investment property to finance the purchase of another investment property.
15. Buyer Lists
A buyer list is a list of individuals who have expressed interest in purchasing a property. Investors often use these lists to generate leads and find buyers for their properties. They’re especially important for wholesale investors who need to bring a buyer to the closing table to finish the wholesale transaction.
At REIPrintMail, we offer some of the best cash buyer lists in the industry. If you’re interested in learning more about these, reach out to one of our marketing coaches here.
16. Buy and Hold
Buy and hold is a real estate investing strategy in which an investor purchases a property and holds it for an extended period of time, usually ten years or more. This type of investment is often used to generate passive income through rental income and appreciation.
17. Buying Subject To
Buying subject to is a method of purchase in which the investor takes over the existing loan on the property. This type of purchase can be beneficial for investors because it allows them to avoid the hassle and expense of getting a new loan.
18. Cash Buyers
Cash buyers purchase properties with cash instead of financing them with a loan. Cash buyers typically close on properties more quickly than borrowers, making them more attractive to sellers.
19. Cash Flow
Cash flow is the difference between the income generated by a property and the expenses incurred to maintain it. Positive cash flow indicates that the property generates more income than it costs to operate, while negative cash flow means the opposite.
20. Cash on Cash Return
The cash-on-cash return is a measure of an investment’s profitability. It’s calculated by dividing the annual cash flow of a property by the total amount of cash invested.
21. Closing & Closing Costs
Closing is the final step in the process of buying or selling a property. At closing, all remaining paperwork is signed, and the ownership of the property is transferred.
Closing costs are the fees and expenses associated with buying or selling a property. These costs can include things like appraisal fees, loan origination fees, title insurance, and more.
22. Cold Calling
Cold calling is the process of calling potential customers (in this case, sellers) in an attempt to generate leads. Cold calling can be an effective way to find properties to invest in, but it’s also one of the most challenging and time-consuming marketing activities. In addition, regulations regarding cold calling are getting stricter, making it more challenging to do without risking the possibility of being fined.
23. Comparative Market Analysis (CMA)
A comparative market analysis (CMA) evaluates similar properties in the same area that have recently sold or that are on the market. This analysis is used to determine the value of a property. Real estate investors often use them to estimate what a property is worth.
24. Contingency
A contingency is a condition that must be met for a contract to be legally binding. For example, a common real estate contingency is the loan contingency, which states that the buyer’s offer is only valid if they can obtain financing.
25. Conversion Rate
The conversion rate is the percentage of leads that are converted into deals, sometimes called closing rate. A conversion rate can be used to track marketing campaigns to see how effectively they generate leads. And investors can also use conversion rates to track other things, like the number of properties an investor purchases out of the total number of properties they look at.
26. Courthouse Leads
Courthouse leads are a type of real estate lead that is sourced from the local county courthouse, which usually come in the form of foreclosure filings or tax lien sales. These properties can often be bought at a discount, making them a good investment opportunity for flipping, wholesale, or rental purposes.
Courthouse leads can be a great source of deals for investors, but they require a bit of research to find the best ones. However, at REIPrintMail, we offer Courthouse Lead Subscriptions that deliver fresh courthouse leads to your inbox every month. To find out if we have a subscription available in your market, book a call with one of our Direct Marketing Coaches here.
27. Crowdfunding
Crowdfunding is a method of raising capital by pooling money from a large group of investors. It’s often used for startups and small businesses, but it can also be used to fund real estate projects.
28. CRM
In real estate, CRM software, which stands for customer relationship management, is used to manage leads and customers. CRM software can help real estate investors keep track of their contacts, schedule appointments, and follow up with leads.
29. Data-Driven Lists & Marketing Campaigns
The days of spray-and-pray marketing are over. Thanks to AI technology, real estate investors can now use advanced data to laser-focus their marketing efforts and attract highly targeted leads.
REIPrintMail has some of the most advanced data-driven mailing lists in the industry. And we offer full data-driven marketing campaign planning for all our direct mail clients. Schedule a complimentary coaching call with one of our Direct Marketing Coaches to learn more!
30. Days on Market (DOM)
Days on market (DOM) measures how long a property takes to sell. Real estate investors might use DOM to help them decide if a market is favorable and to help them negotiate the purchase price of a property with a traditional seller whose home has an extended number of days on market.
31. Dead Leads
A dead lead is a lead that is no longer interested in buying or selling a property. In real estate, leads can go cold for a variety of reasons. For example, a seller might have already sold their property, or a buyer might have found another property. Real estate investors should be cautious when marking a seller lead as dead because giving up too soon on sellers who have not yet sold their home can lead to missed opportunities.
32. Depreciation
Depreciation is an accounting method that allows investors to deduct the cost of an asset over its useful life. In real estate, depreciation can be used to deduct the cost of a property over 27.5 years. Depreciation is also used to describe the decrease in value of a property due to wear and tear, market conditions, or other factors.
33. Digital Marketing
Digital marketing is a type of marketing that uses the internet and digital devices to reach potential customers. Real estate investors often use digital marketing to generate leads and market their properties. This can come in the form of PPC ads, social media ads, and ads on specific websites where sellers frequent. However, research shows that digital marketing is less effective than direct mail marketing.
34. Direct Mail Marketing
Unlike its digital counterpart, direct mail marketing uses physical mail to advertise to potential sellers. Though you might not think it would be, studies have shown that direct mail marketing is 600% more effective than digital marketing! Direct mail marketing is commonly used by real estate investors in order to generate motivated seller leads.
If you’d like to learn more about how direct mail marketing can help you find and close more deals, schedule a complimentary coaching call with one of our Direct Marketing Coaches at REIPrintMail here. (Our coaching calls are always 100% free, so you have nothing to lose and potentially everything to gain!)
35. Distressed Properties
Distressed properties are properties that are in poor condition or are facing foreclosure. Real estate investors often buy distressed properties because they can be purchased at a discount.
36. Do Not Call (DNC) Registry
The Do Not Call (DNC) Registry is a national database of phone numbers that have been registered by people who do not want to receive telemarketing calls. In real estate, the DNC Registry is used to comply with federal law and avoid calling leads who have opted out of receiving telemarketing calls.
37. Driving For Dollars
Driving for dollars is a method of finding distressed properties by driving investors around neighborhoods looking for properties that are in poor condition, have overgrown landscaping, or have other signs of neglect. Once a property is found, the investor will research the owner to see if the property is worth pursuing.
38. Due diligence
Due diligence is the process of investigating a potential investment to determine if it is a good fit. In real estate, due diligence might involve things like inspecting a property, running a title search, and evaluating the local market.
39. Easement
An easement is a legal right to use someone else’s property for a specific purpose. For example, an investor might have an easement to use a neighbor’s driveway to access their own property.
40. Equity
Equity is the portion of a property’s value that the owner actually owns. For example, if a property is worth $100,000 and the owner owes $80,000 on it, the owner has $20,000 in equity. Real estate investors typically target homeowners with a lot of equity, typically 50% or more, because they’re more likely to be motivated to sell at a wholesale price.
41. Escrow
Escrow is a third-party service that holds funds in trust until they’re needed for a transaction. This can include holding a deposit until closing or holding tax payments until they’re due. Real estate investors often use escrows to close deals quickly and efficiently.
42. Estimated Value
The estimated value of a property is the price that an appraiser assigns to a property. This value is usually lower than the market value, which is the price that a willing buyer and seller would agree on.
43. Failed Listing
A failed listing happens when a real estate agent is unable to sell a property during the listing period. This can happen for a number of reasons, including overpricing, poor marketing, or lack of interest from buyers. Failed listings present an opportunity for real estate investors, who can often scoop up properties at a discount.
44. Filters or List Filtering
When real estate investors work with mailing lists of seller leads, they often use list filters or search filters to target a specific type of lead. For example, an investor might filter their list of sellers to include only vacant properties with homeowners with over 50% home equity. By stacking the filters, the investor can laser target their marketing efforts to a very specific type of lead that’s more likely to result in a sale.
Our list filtering tool enables you to segment your mailing lists by attributes such as property type, financial/mortgage information, owner type, equity, property features, demographics like age, income level, and whether they have children or are adult only households, and much more.
45. Fix and Flip
A sort of real estate investment known as a “fix and flip” occurs when an investor purchases a property, does any necessary repairs or modifications, and then sells the property for a profit. Experienced investors who are knowledgeable about the neighborhood market and know how to increase the value of a property frequently employ this strategy. Investors specializing in this method are sometimes referred to as flippers or house flippers.
46. For Sale By Owner (FSBO)
A for sale by owner property, or FSBO, is a property that is being sold by the homeowner without the help of a real estate agent. If you’re an investor, unlisted properties can be a fantastic opportunity to snag a lower price since the seller isn’t paying out a commission.
47. Foreclosure
Foreclosure is the process of a lender repossessing a property when the owner fails to make mortgage payments. This often results in a foreclosure sale of the property at auction. Real estate investors often target foreclosed properties because they can be purchased at a discount.
48. Free & Clear
A property is said to be free and clear when it’s owned outright, and there are no mortgage payments or liens against it. This property type can be especially attractive to investors who can afford to pay cash for the property because they’ll have full equity ownership from the start.
49. Follow-up
In real estate investing, follow-up is the process of staying in touch with sellers through various methods, including phone calls, emails, texts, and direct mail. The gold is in the follow-up since most sellers need at least 6-7 touchpoints before they’re willing to sell. It’s not uncommon for real estate investors to close a deal 6-12 months after the date of their initial contact with a seller. And since most other real estate investors will give up after their third follow-up, the investor who stays in contact with these sellers for the long haul often wins the deal.
Automating your follow-up system is one of the best ways to stay consistent and close more deals. Our team at REIPrintMail and REIComplete can help you with this! Schedule a call with us to learn more.
50. Funnels
A real estate funnel is a system that an investor uses to generate, nurture, and convert leads into deals. The system might include online ads, direct mail marketing, cold calling, or a combination of lead-generation strategies.
The Bottom Line
Real estate investing is a complex field with its own language. By familiarizing yourself with these 50 terms, you’ll be well on your way to understanding the ins and outs of this industry.
Don’t forget to read the continuation of this series in part two, found here.
