Assumption of mortgage is a real estate transaction where the buyer accepts liability for the existing mortgage debt on the property, often facilitating a smoother and potentially cheaper transfer of ownership compared to obtaining a new loan.
A Balance Sheet is a financial statement that presents the financial position of a company at a specific point in time. It details the company's assets, liabilities, and shareholders' equity, ensuring that the assets are balanced by the sum of liabilities and equity.
Capital structure refers to the composition of capital invested in a property, reflecting the interests of those who contributed both debt and equity capital.
The term 'Cash Out' refers to the process of completely liquidating an asset, enabling the owner to receive its total monetary value in cash.
Cash-on-cash return (CoC return) is a rate of return commonly used in real estate transactions that calculates the cash income earned on the cash invested in a property.
Credit in real estate finance pertains to the availability of borrowed money and the trust extended by lenders to borrowers. It also includes accounting implications, reflecting liabilities or equity on the right side of the ledger.
A dummy corporation is an entity established to facilitate business transactions on behalf of a principal by superficially holding certain assets or liabilities.
Equity represents the interest or value that an owner has in real estate over and above the liens or debts against it. It is calculated by subtracting the total liens from the market value of the property.
Financial leverage refers to the use of borrowed funds to increase an investment's potential return. While it can amplify returns, it simultaneously increases the risk of loss.
A financial statement is a formal record of the financial activities and position of a business, person, or other entity, revealing the income, expenses, assets, liabilities, and equity.
A pre-foreclosure sale is a transaction in which a third-party buyer purchases a property after the underlying mortgage has been posted for foreclosure but before the property has been repossessed by the lender or liquidated to pay the debt.
Private placement is an investment approach where a security is sold directly to a small group of private investors, generally under exemptions to registration provided by the Securities and Exchange Commission (SEC) and state securities laws.
Progressive taxation is a tax system where the tax rate increases as the taxable amount increases. This taxation method aims to distribute the tax burden more equitably, making wealthier individuals or entities pay a higher portion of their income or assets.
Purchase capital is the total amount of money used to acquire real estate, irrespective of its source, encompassing both equity and debt components.
