An after acquired clause is a provision in a mortgage loan that includes property subsequently purchased as security on the existing mortgage. This can complicate future financing and the restructuring of loans as additional acquired property becomes part of the original security.
A condemnee is a property owner who is required to forfeit all or part of their property to the government or a governmental authority through the process of condemnation.
Direct damages refer to the compensation paid by a government entity for the value of land and improvements taken through eminent domain proceedings. It contrasts with indirect damages and severance damages.
Eminent domain is the power of the government or its delegate to take private property for public use, with the requirement that the owner is fairly compensated. This legal principle ensures that essential public projects can proceed while protecting the property rights of individuals.
An Environmental Site Assessment (ESA) is a detailed analysis of a property to identify potential or existing environmental contamination liabilities, typically conducted before acquiring title to the property to comply with legal requirements and mitigate risks.
A Fixed-Price Lease-Purchase Option is a contractual agreement where a tenant has the option to purchase the leased property at a predetermined price after or during the lease term.
The Going-In Cap Rate, also known as the entry cap rate, is the ratio of the initial year's Net Operating Income (NOI) to the acquisition price of an investment property. This key metric helps investors assess the initial yield they can expect from a real estate investment.
Land banking refers to the practice of acquiring parcels of land with the intention of holding onto them until they become more valuable or are ready to be developed.
A real estate acquisition strategy where buyers use minimal or no cash down payments, often relying on seller financing, existing loan assumption, or other creative financing methods to achieve maximum leverage.
An option to purchase is a contract granting the holder the right, but not the obligation, to buy a property at a specified price within a set timeframe, subject to pre-defined conditions.
A Phase I Environmental Site Assessment (ESA) is a preliminary investigation conducted to identify potential environmental contamination liabilities before acquiring or leasing a property. It typically includes a review of historical land use records, site inspections, interviews, and financial records.
Public Purpose is the justification that the government must establish in its powers of Eminent Domain to acquire private property, demonstrating that the property will be used for the public good.
A purchase option is a contractual right granted to a party (typically a tenant) that gives them the opportunity, but not the obligation, to buy an asset or property at a specified price within a set period.
In real estate, a 'spread' refers to several key financial differences, often pertaining to prices or interest rates, that can significantly impact transactions, investments, and profits.
A straw man is an individual who purchases property on behalf of another person or entity to conceal the identity of the actual purchaser. This tool is often employed in real estate transactions to prevent price inflation from sellers realizing the true buyer's identity.
Acquiring property with an existing mortgage, but the buyer does not become personally liable for the debt. Contrasted with assumption of mortgage.
A real estate transaction where a buyer acquires property that has an existing mortgage but does not assume personal liability for the debt. The buyer must keep making payments to avoid losing the property, and if a default occurs, only the buyer’s equity is at risk.
