Chapter 17 - Real Estate Investment Analysis and Business Opportunity Brokerage Flashcards
Appreciation
An increase in the worth or value of property.
Asset
Anything of value.
Balance sheet
A financial report that shows the company’s financial position at a stated moment in time.
Cash flow (after-tax cash flow)
The total amount of money generated from an investment after expenses have been paid.
Dynamic risk
Risk that arises from the continual change in the business environment and that cannot be transferred to an insurer.
Equity
An investor’s own funds in a real estate investment property (the interest that an owner has in property over and above any indebtedness).
Going concern value
The value of an established business property compared with the value of just the physical assets of a business not yet established.
Goodwill
The intangible asset attributed to a business’s reputation and the expectation of continued customer loyalty.
Income statement
A summary of all income and expenses of a business for a stated period of time.
Investment
The outlay of an investor’s money in anticipation of income or profit.
Investment value
The worth of a property to an individual investor based on that investor’s individual standards for achieving a goal such as risk tolerance.
Leverage
The use of borrowed funds to finance the purchase of an asset; the use of another’s money to make more money.
Liquidity
The ability to sell an investment quickly without loss of one’s investment.
REIT
Offers investors the opportunity to invest in a pool of income-producing properties under professional management.
Replacement cost
The cost that would result with materials of the same utility but not identical.
