Say What?: CRE lingo that will up your game

  • On May 24, 2018

In the ever increasing complexity of today’s market, knowing the gist behind the jargon is important to get ahead. Here are five basic phrases you should know to get ahead of the game.

  1. Skin in the Game: Don’t worry, you won’t be consulting a dermatologist for this one! Skin in the game refers to how much hard money the borrower has laid out, and often communicates to potential lenders how invested – financially and otherwise – the lendee really is.

  2. Crowdfunding:  A relatively new phenomenon, crowdfunding refers to an internet based platform that invites a variety of people to invest capital into a project. For the world of commercial real estate, this marks a dramatic change. The lower minimum investment cap and potential for outsized returns has attracted a far more diverse selection of investors.

  3. Hair on It: This refers to the complications or negotiating inherent in the deal. Of course, every deal will have some “hair” on it, which is another reason having a savvy mortgage broker is vital.

  4. Upside: The potential in otherwise unattractive properties is frequently called it’s upside. For example, a dilapidated multifamily building with a host of legal issues, still might have a lot of upside due to its prime location.

  5. Take it to the Map: Buying an undeveloped tract of land and going through the process of preparing it for development can tremendously increase it’s value. Those in the know refer to this as taking it to the map.

There you have it! Use these five phrases to stay in the know and increase your potential to succeed.

 

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