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Real Estate Investments

Principles 2 Chapter 18
Horizontales
An appraisal term meaning the result of a person's individual choices and preferences
Income earned from the sale of an asset
A tax device that allows cash flows from an underlying block of commercial mortgages to be passed through to security holders without being subject to income taxes at the level or trustee or agent
Trust ownership of real estate by a group of at least 100 individuals who purchase certificates of ownership in the trust, which in turn invests the money in real property and distributes the profits back to the investors free of corporate income tax
A transaction in which the sales price is paid in two or more installments over two or more years
A legal means by which an investor may reduce or defer payment of part of their federal income tax
An amount by which tax owed is reduced directly
An increase in the volume of money and credit relative to available goods resulting in a substantial and continuing rise in the general price level
The use of borrowed money to finance the bulk of an investment and to magnify the rate of return
Verticales
Distribution of investments among several companies or several types of investments (such as savings accounts, individual retirement accounts, stocks, bonds, mutual funds, and real estate) in order to average the risk of loss
An increase in worth or value of a property due to economic or related causes, which may prove to be either temporary or permanent; opposite of depreciation
In real estate investment, an expense deduction for tax purposes taken over the period of ownership of income property
A process of acquiring additional properties through refinancing properties already owned and then reinvesting the loan proceeds in additional property
The net spendable income from an investment, determined by deducting all operating and fixed expenses from the gross income. If expenses exceed income, a negative cash flow is the result.
A transaction in which all or part of the consideration is the transfer of like-kind property (such as rental for rental)
The dollar amount associated with an asset to determine annual depreciation and gain or loss on the sale of the asset. The owner's basis is the cost of the property; adding the value of any capital expenditures for improvements to the property and subtracting any depreciation claimed as a tax deduction yields the adjusted basis
Money or property given to make up any difference in value or equity between two properties in an exchange