Common Real Estate Terms
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There are currently 10 names in this directory beginning with the letter A.
The Absorption Rate is the net difference in available unit square feet for lease between two dates, typically expressed as a percentage.
partner once they have an annual income of $200,000, or $300,000 for joint income, for the last two years with an expectation of earning the same or higher in the future. If the individual does not meet this requirement, they will also qualify if they, either individually or with their spouse, have a net worth above $1 million.
The buyer pays the Acquisition Fee as an upfront fee to the general partner for the service they provided to find, analyze, evaluate, source financing, and close the investment. The fees range depending on the size of the deal.
The Ad Valorem Tax is a tax imposed at the time of a transaction, based on the value of the transaction.
Annual Percentage Rate (APR)
The Annual Percentage Rate reflects the cost of borrowing money. This rate represents the entire disclosure of the interest rate, loan discount points, loan origination fees, and other lender-paid credit costs.
Regarding apartments, an Apartment Syndication is typically a partnership between general partners and the limited partners to acquire and sell an apartment community while sharing in the profits created through the process.
Appreciation reflects the increase in the value of an asset over time. Appreciation occurs through two main types: forced and natural. Natural appreciation occurs when the economy is performing well and the market cap rate decreases "naturally". Forced appreciation occurs through increasing the net operating income (either by increasing the revenue or decreasing the expenses).
Asset Management Fee
An Asset Management Fee is an ongoing fee paid annually to the general partner for property oversight.