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Real Estate Financial Modeling Accelerator (Updated October 2024)

Prior to launching the Accelerator program, Michael and I fielded email after email requesting a more structured real estate financial modeling training program on the site. Over the years, we've covered hundreds of real estate modeling…

Special Warranty Deed

A special warranty deed will allow for recourse against the seller (grantor) if any issues (encumbrances or challenges to title) come after the transfer of the property to the buyer (grantee) that were created during the time that the seller…

Limited Warranty Deed

See Special Warranty Deed.

General Warranty Deed

Common in residential real estate and not generally used in commercial real estate, a general warranty deed guarantees that the seller has the right to sell the property and that it is free of any encumbrances such as debt, liens, or any adverse…

Quitclaim Deed

A quitclaim deed is a type of deed that transfers all interest the seller has, or may have, but there are no warranties of title and no guarantees against any encumbrances. This type of deed provides no legal recourse for the new owner. Related…

Leasehold Interest

In real estate, a leasehold interest refers to a structure where an individual or entity (lessee) leases the land (i.e. ground lease) from the fee simple owner (lessor) of the land for an extended period of time. The lessee of a leasehold estate…

Ground Lease

A lease structure where a real estate investor rents the land (i.e. ground) only. In the case of a ground lease, generally one party owns the land (i.e. fee simple interest) while a separate party owns the improvements (i.e. leasehold interest).…

Letter of Intent

A non-binding legal document used to communicate the high-level business terms in a real estate transaction. The letter of intent, or LOI, is most often used by the buyer at the early stages of a real estate purchase. The buyer sends a "letter"…

Land Use Restriction Agreements (LURA)

An agreement between a property owner and the government whereby the property owner agrees to limit the use of its property in exchange for some pre-determined tax credits or bond financings. A Land Use Restriction Agreement (LURA) is most common…

TRevPAR

See Total RevPAR

Key Money

Money provided by a hotel operator or hotel "flag" to a hotel owner in order to secure a hotel management or franchise agreement at a hotel property. In highly competitive hotel markets, where operators are looking to get a foothold or expand…

Hold/Sell Analysis

The process of analyzing whether to continue holding (i.e. owning) income-producing real estate, or whether to sell the real estate and reinvest the proceeds in an alternative opportunity. Many professional real estate asset and portfolio managers…

Residual Land Value Analysis

Residual land value is a method for calculating the value of development land. This is done by subtracting from the total value of a development, all costs associated with the development, including profit but excluding the cost of the land.…

ROFR

Pronounced Rōfer. See Right of First Refusal.

Right of First Refusal

Although they can be numerous in iterations, a ROFR (pronounced Rōfer) is a contractual clause that enables a third party to step in and purchase and/or lease a property based on what was negotiated between the Owner and a potential buyer/lessee. As…

Land Assemblage

A tactic employed in land acquisition, where a real estate professional acquires two or more adjacent parcels, combining them into one. Land assemblage can be a time-consuming, complicated process - with the complexity increasing exponentially…