I'm lost with all this real estate lingo.

I'm lost with all this real estate lingo.

New York, NY · Member since 2012 · 17 posts · 3 votes

Okay, so I am a beginner, and when I say beginner I mean BEGINNER! I am just now arriving at the beach... my feet have NOT touched the water yet. Anyways, I am 20 years old and want to learn this real estate investing stuff SO BAD but every single post I come across or site, forum etc. I tend to get lost easily with all of these terms everyone uses. So then I find myself back at square one. Would someone be kind enough to create a thread called "Terms every real estate investor must know". I know some of you may be thinking "stop being lazy and just look up the terms you don't recognize". But that's the thing.. I DO look them up and then it leads to 50 million other things I don't understand. Did any of you have this problem when you started out? Oh, and by the way the main thing I want to do is buy a multi-unit property and live in one of the units that way the tenants are paying my rent and giving me a chance to save money for the next investment. Thanks so much in advance guys. All advice is appreciated.

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Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes

14y

Originally posted by Charles Morgan:

I own 4 rentals and just this week learned that PITI is
Payment
Interest
Taxes
Insurance
Lol (not a real estate term) :-)

Actually, its Principle, interest, taxes, and insurance. :-).

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Member since 2013 · 67 posts · 4 votes
13y
Originally posted by Ron Climer:
Latham
You don't need to read a book or buy a real estate dictionary. You don't need to know all the lingo. Whenever someone that you are talking to uses a word that you don't know what it means, just ask them what it means.
When Mr. Big Shot investor says," This property will give you a 12% ROI" Just ask him what is ROI? How do you compute that? People love to explain things. As you learn what you need to know, you will, at the same time, cause the people to like you better. It will cause them to believe that they are smarter than you. That is good if you are buying from them. It is a phenomenon. The better they like you, the more likely they are to get the price and terms right for you.

Start looking at houses. Ask the seller or the Realtor anything that you need to know. You will learn fast. My favorite question is how do you know that? When people say things like this house comps out at $100,000 ask them"What does comps out mean?". How do you know what it comps out at?

Just ask questions. Don't worry about looking foolish. You are not applying for a job

Good advice Ron!
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Jeff Rabinowitz
Investor/Landlord · Farmington Hills, MI · Member since 2011 · 1k+ posts · 1k+ votes
13y
The best way to learn how RE investors speak is to interact with them. This is a great site to do that. My learning curve accelerated when I actually met some investors and started hanging out with them. It wasn't long before I did some deals and built a group of advisers and colleagues I could turn to for advice.

The best way to meet investors in person is to go where they go. Are there any Real Estate Investor Associations (REIA) in your area? If so, go to some meetings. It doesn't matter what the topic is, just go. When you are there your job is to meet some people, as many as you can, and start looking for ways that you can help each other. You may be surprised at how willing the people attending are to share. After all, they are there for the same reasons you are.
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Harry M.
Real Estate Investor · Dallas, TX · Member since 2010 · 449 posts · 173 votes
13y
This reminds me of 4 years ago, when my wife and I were first getting serious about the idea of investing in real estate (we got our first property a year later). The terms were pretty confusing. I'd see some abbreviation like COC (cash on cash return) and wouldn't know what it meant. So I'd google it. I'd find some info, but also more terms I didn't know like NOI (Net operating income) and CAP (capitalization rate) and GRM (gross rent multiplier), ROI (return on investment), ROE (return on equity), DTI (debt to income ratio), DSC (debt service coverage) and so on. So then I'd google those. Learn some more, but hit more I didn't know. So then - you got it - I'd google those too. The whole time with a text document open in which I'd take notes. That really helps make the info stick. As this process goes on, at first you get more confused as you take on more info that you haven't fully integrated yet. But if you keep at it, there comes a point where you hit a critical mass and it all makes sense. And the thing is, during all this googling, there was a ton more info I learned on top of the dozen or so abbreviations I memorized.
I guess what I'm saying is don't be scared of not knowing something. Just find out what you can, understand it as well as you can with the knowledge you have at the time, and keep learning. It will all come together if you stick at it.
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Scarlet Elaina
Burlingame, CA · Member since 2013 · 1 post · 1 vote
13y
I just wanted to thank the original poster and every one who answered this thread, as I am also a beginner and found all of the answers very helpful.

Cheers,
Scarlet
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