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(Property) Flashcards

7 cards from real Investment practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 (Property) flashcards as text

  1. What is the 'BRRRR' real estate strategy?

    Answer: Buy, Rehab, Rent, Refinance, Repeat

    BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat, a method to recycle capital into new deals.

  2. What is the debt service coverage ratio (DSCR)?

    Answer: Net operating income divided by total debt payments

    DSCR measures whether income covers debt obligations; above 1.0 means income exceeds payments.

  3. What is 'appreciation' in real estate investing?

    Answer: An increase in a property's market value over time

    Appreciation is the rise in property value over time, building investor equity.

  4. Why might an investor prefer a multifamily property over a single-family rental?

    Answer: Multiple units spread vacancy risk across tenants

    With several units, one vacancy has less impact since other tenants still generate income.

  5. What is an escrow account commonly used for in property ownership?

    Answer: Holding funds for property taxes and insurance

    Lenders often use escrow to collect and pay property taxes and insurance on the owner's behalf.

  6. What does 'cash-on-cash return' measure?

    Answer: Annual pre-tax cash flow divided by total cash invested

    Cash-on-cash return compares yearly cash flow to the actual cash put into the deal.

  7. What is a common risk of over-leveraging in real estate?

    Answer: Inability to cover payments if income drops or rates rise

    High leverage magnifies risk; falling income or rising rates can make payments unaffordable.