Leverage is the use of borrowed capital to increase the size of an investment. In real estate, leverage most commonly takes the form of debt secured by the property, such as a mortgage, construction loan, or other financing structure. Leverage is a fundamental tool in real estate because it can amplify returns. It is also […]
Key money is an upfront payment made by a tenant to secure a lease, separate from the security deposit and rent. It is often associated with competitive rental markets where tenants may pay extra to obtain a desirable unit, or with commercial leasing where a tenant may pay for the right to assume a lease,
Kiting is a form of financial misconduct that involves exploiting timing differences in the movement of funds to create the appearance of available money that does not actually exist. The most common form is check kiting, where funds are moved between accounts using checks or transfers timed to take advantage of float, temporarily inflating balances
A jumbo loan is a mortgage that exceeds the maximum loan amount eligible for purchase or guarantee by government sponsored entities in the conventional mortgage market. In other words, it is a loan that sits above the conforming loan limit for the area where the property is located. Because jumbo loans fall outside the conforming
A junior mortgage is a loan secured by a property that is subordinate to another mortgage on the same property. The primary mortgage is the senior mortgage, and the junior mortgage sits behind it in priority. If the borrower defaults and the property is foreclosed, the senior lender is paid first from sale proceeds. The
Joint tenancy is a form of property ownership where two or more people hold equal ownership interests in the same property, with a right of survivorship. The right of survivorship means that when one owner dies, their ownership interest automatically transfers to the remaining joint tenant or tenants, rather than passing through the deceased owner’s
An IPO, short for initial public offering, is the process by which a private company offers its shares to the public for the first time and becomes a publicly traded company. Through an IPO, a company raises capital from public market investors, and existing shareholders may gain liquidity by selling some of their holdings. IPO
Inflation is the rate at which the general level of prices for goods and services rises over time, reducing the purchasing power of money. In practical terms, inflation means that the same dollar buys less in the future than it buys today. Inflation is often discussed at the macroeconomic level, but it has direct, measurable
A housing market recession refers to a period of sustained weakness in housing activity and pricing. It often involves declining home sales, reduced construction activity, tightening credit, rising inventory, and downward pressure on prices or rents, depending on the segment of the market. A housing market recession is not always the same as a broader
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