This is the measure of returns on an investment's portion equity that is expressed in ratio of earnings related to the amount of invested equity. It is computed by dividing the earnings on equity by the amount of equity.
Latest Posts
Cost Recovery
This is an annual debit of a section of the cost of a particular asset over its useful lifetime through depletion, depreciation, and amortization. Depletion recovers the cost of natural resources, depreciation recovers the cost...
Bulk Warehouses
Typically located near major transportation hubs for trucks' ease of access, bulk warehouses are large buildings ranging from 50,000 to 1,000,000 square feet. These areas are specifically designed to accommodate various trucks...
Commission
This refers to the compensation paid to a licensed real estate broker that is usually taken from a percentage of the selling price of the property sold. The exact percentage varies, but usually it is 5% to 6% of the final sales...
Fannie Mae (FNMA)
Referring to the Federal National Mortgage Association, Fannie Mae (FNMA) is a government-sponsored enterprise that is authorized to provide, guarantee, and securitize mortgages for residential and multifamily real estate. Fannie...
Co-investment program
This is a partnership in investment that allows multiple pension funds to co-invest their assets in either a singular property or multiple properties. Its appeal to investors is that it allows them to invest in a larger property...
Forward commitments
Typically used to define a lender's obligation to fund a mortgage, forward commitments are contractual obligations to carry out certain financing activities upon the satisfaction of any stated conditions. They usually specify the...
Balance Sheet Investing
In contrast to using third-party funds or securitization proceeds, balancing sheet investing has to do with an investor who uses their own funds to invest in an asset such as real estate. These investments are reported as assets...
DST
This is short for Delaware statutory trust, which is an ownership model used by real estate investors wherein a separate legal entity is used to defer capital gains through taxes with the utilization of a 1031 tax-deferred...
Comparative Advantage
This is a theory wherein cities or areas tend to produce items or support activities where they have the greatest advantage over other areas. It is defined by their factors of production and demand as well as the quality of life...
