Investment and Business Brokerage Flashcards
return
total income, direct cash flow and indirect benefits
leverage
using borrowed money to increase the return on an investment
appreciation
increase worth or value of real property
income property
property held for producing income and profit on its sale
cash flow
spendable income generated by income property
pyramiding
a technique used by many investors to systematically leverage the equity of one property to purchase multiple, or larger income properties
exchange
transferring property with the advantage of deferring taxation of capital gains
alternative minimum tax
applies to taxpayers with high economic income by setting a limit on tax benefits for real estate ownership
boot
difference in price between properties such that the property being bought costs less than the one being sold
capital gain
taxable profit on on investment
difference between adjusted basis of property and its net selling price
adjusted basis
the cost of real estate property, after accounting for any increases or decreases to its original value
basis
the investor’s initial cost for the real estate
depreciation
the process used to deduct the costs of buying and improving a rental property
tax credit
direct reduction in tax due
National Register of Historic Landmarks
the official list of all the country’s historic buildings, districts, sites, structures, and objects worthy of preservation
installment sales
a sale of property where seller receives payment for the full purchase price on an installment basis
marginal tax rate
rate at which the top dollar is taxed, top applicable income tax bracket
syndicate
a joining together of two or more people to carry out one or more business projects
real estate investment syndicate
a form of business venture in which a group of people pool their resources to own and/or develop a particular piece of property
private syndication
a small group of closely associated and/or widely experienced investors
public syndication
generally involves a large group of investors who may or may not be knowledgeable about real estate investment
Securities and Exchange Commission
federal agency that oversees securities exchanges, securities brokers and dealers, investment advisors, and mutual funds in an effort to promote fair dealing, the disclosure of important market information, and to prevent fraud
real estate investment trusts (REITs)
trust ownership of real estate by a group of at least 100 individuals who purchase certificates of ownership in the trust
uniform Commercial Code
set of standardized laws that regulate the transfer of personal property
Bulk Transfer Act
section of UCC that is most applicable to real estate
regulates transfer of real estate business, prevents fraud when a business is sold
besides title to real estate or present lease, why else might someone sell a business?
- fixtures and stock in inventory
- business name
- customer lists
- goodwill (community participation)
- special rights (copyrights, patents, franchises, licenses)
a property’s equity represents it current value less____
any liens on that property
bulk transfer act requires that purchaser of a business______
notify creditors before the sale