Terminal value, or TV for short, refers to an asset, business, or project’s value beyond a forecasted period. TV assumes an asset will continue growing at a predetermined growth rate in perpetuity once the forecast period is over. The process of how to calculate terminal value can be done in a few different ways, including discounted …
Definition: Real estate syndication refers to a group of investors pooling resources so they can invest in properties worth much more than any individual investor could afford on their own. What is real estate syndication? Real estate syndications involve multiple investors coming together, sharing both their financial and intellectual resources, to purchase high-valued properties. In …
What is a retail investor? So, what exactly is a retail investor? It’s someone who buys and sells bonds, stocks, mutual funds, ETFs, or other securities for themselves instead of on behalf of organizations or other individuals. That means retail investors keep all the profits they make on investments and don’t have to share them with …
What is amortization? As an investor, you might need to pay debts in installments. That’s called amortization. Let’s say that you take out a home loan to expand your real estate portfolio. Your lender will spread out the amount you owe into a series of fixed payments that reflect the total amount of the loan …
What is the 1% Rule? The one percent rule (or 1% rule) is a rule of thumb that determines whether an investment property provides value. It calculates if the monthly rent generated from a piece of real estate is higher than its monthly mortgage payment. If the rent is more than the mortgage payment, it means the property …
What is an institutional investor? Here’s the quick definition for an institutional investor: It’s an organization that buys and sells stocks, bonds, other securities, and assets like real estate for organizations and other people. Institutional investors are different from retail investors who buy and sell securities and assets for themselves and make the majority of trades on …
What is tokenization? Tokenization is a process where assets are converted into a digitized format. This includes converting ownerships and rights to a digital form. This technology has been around for several decades to help encrypt sensitive information such as medical records or credit card information. Now, new capabilities provided by blockchain technology are expanding …
What is a safe haven investment? In the wake of the recent economic downturn and market volatility, you may be searching for investments that limit your risk or traditionally perform well despite a fluctuating market. If that sounds like you, safe haven investments may be just what you’re looking for. Safe haven investments are types …
What is an adjustable-rate mortgage? An adjustable-rate mortgage (ARM) is a type of mortgage in which the interest rate on the loan varies with prevailing market rates. This means that, over time, the monthly payment amount may go up or down, depending on the current interest rates set by the Fed. ARMs are often used …
What is a 1031 exchange? A 1031 exchange in real estate allows you to change your investment type without “cashing out” the capital gains. This allows your investments the chance to keep growing without taxes. The 1031 exchange applies across different kinds of real estate, including residential, commercial, industrial, special use, etc., and can be …
