Our guide to real estate, investing, strategies, and everything in-between.
What is DTI? DTI stands for debt-to-income and is a term used to describe the percentage of your monthly income before taxes that goes toward paying any debts. DTI is used in determining credit scores and lenders when deciding whether or not to loan money. Debts used to calculate debt to income ratio include car …
What is EBITDA? Earnings before interest, taxes, depreciation, and amortization (EBITDA, for short) is a metric that measures financial performance. Companies might find it a useful alternative to calculating net income. That’s because it figures out earnings without considering any accounting or financial deductions like tax, interest, and debts, so you can ignore all the …
What is a real estate bridge loan? A real estate bridge loan (or swing loan) is a type of financing that’s popular with both investors and homeowners. It “bridges” the gap between the time an investor’s initial funds run out and the point at which another funding source becomes available. It can be beneficial when …
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 …
