Cash flow refers to the periodic amounts available to an equity investor after deducting all periodic cash payments from rental income, providing insight into the liquidity and operational viability of a real estate investment.
The Federal Agricultural Mortgage Corporation, commonly known as Farmer Mac, was established to provide a secondary market for agricultural loans. This organization helps enhance the availability, affordability, and negotiation flexibility for long-term funding for agricultural operations by purchasing and pooling loans from local lenders.
The Federal Home Loan Mortgage Corporation (FHLMC), commonly known as Freddie Mac, is a government-sponsored enterprise (GSE) that helps provide liquidity, stability, and affordability to the mortgage market in the United States.
An illiquid asset is an asset that cannot be quickly converted into cash without a substantial loss in value. This is a critical consideration in real estate investing, as properties can take considerable time to sell and often incur significant transaction costs.
Illiquidity refers to the inability to quickly convert an asset into cash without a significant loss in value. Real estate is considered an illiquid investment because of the time, effort, and costs required to sell properties.
Liquidity refers to the ease with which an asset can be quickly converted into cash without significantly affecting its market price. This concept is crucial in financial and real estate contexts, as it influences the ability to sell assets promptly and efficiently.
The money market involves the interaction of buyers and sellers of short-term (one year or less) debt instruments, providing liquidity for major financial institutions and companies. Examples include Treasury bills, commercial paper, and certificates of deposit.
The secondary mortgage market involves mechanisms for buying and selling residential first mortgages. It enables lenders to sell mortgages and transfer the associated debt, thereby improving liquidity and fostering a more stable housing finance market.
Working capital is a financial metric that represents the difference between a company's current assets and current liabilities, providing insight into its short-term financial health and operational efficiency.
