§ Learn / Glossary / 100 terms

The vocabulary,
all of it.

Every term an off-market investor actually runs into, defined plainly. The ones that need more than a sentence get their own page.

A row of glossary entry cards, each with a headword and definition lines

Foreclosure & distress

14 terms

Pre-foreclosure: The period after a homeowner defaults on the mortgage but before the property is sold at a foreclosure auction. The owner still holds title and still has options. Full page ->
Notice of Default (NOD): The document a lender records with the county to begin a non-judicial foreclosure after a borrower falls behind. It states the breach and the intent to sell. Full page ->
Lis Pendens: Latin for suit pending. A notice recorded in a property's chain of title warning that a lawsuit affecting the title is underway; anyone acquiring an interest takes it subject to the outcome. Full page ->
Notice of Sale: The recorded notice that sets the date, time and place of a foreclosure auction. It follows the notice of default after a statutory waiting period.
Trustee Sale: The foreclosure auction in a non-judicial state, conducted by the trustee named in the deed of trust.
Judicial Foreclosure: Foreclosure carried out through the courts, where the lender must file a lawsuit. This is the process that produces a lis pendens.
Non-Judicial Foreclosure: Foreclosure under a power-of-sale clause without a lawsuit. Faster than judicial foreclosure and governed by state statute.
Deed of Trust: A security instrument used instead of a mortgage in many states. The borrower conveys title to a neutral trustee until the loan is repaid.
Power of Sale: A clause in a deed of trust that lets the trustee sell the property on default without going to court.
Redemption Period: A statutory window in some states during which a former owner may reclaim the property after a foreclosure sale by paying what is owed. Length varies widely by state, and many states have none.
Deficiency Judgment: A court judgment for the shortfall when a foreclosure sale does not cover the debt. Permitted in some states and barred in others.
REO (Real Estate Owned): Property the lender took back because it did not sell at the foreclosure auction. It is now bank-owned inventory.
Short Sale: A sale for less than the outstanding mortgage balance, which requires the lender's approval to release its lien.
Deed in Lieu of Foreclosure: An arrangement where the owner voluntarily deeds the property to the lender to avoid a foreclosure proceeding.

Distress signals & lead types

12 terms

Absentee Owner: An owner whose mailing address differs from the property address, typically a landlord or an out-of-area owner.
Motivated Seller: An owner with a concrete reason to sell quickly, often below market: distress, a life event, or carrying costs they no longer want.
Probate: The court process that settles a deceased person's estate, including transferring any real property to heirs or a buyer.
Tax-Delinquent Property: Property whose owner has fallen behind on property taxes. The delinquency is public and is a classic motivation signal.
Tax Lien: A lien placed on a property for unpaid taxes. In some states investors buy the lien itself and earn statutory interest.
Tax Deed: A deed conveying title to a property sold by the county to satisfy unpaid taxes.
Vacant Property: A property with no current occupant. Vacancy often correlates with deferred maintenance and a disengaged owner.
Code Violation: A municipal citation for property-condition or zoning breaches. Often public, and a useful distress signal.
Tired Landlord: A long-time rental owner worn down by management burden, repairs, or problem tenants, and therefore open to selling.
High Equity: A property whose market value substantially exceeds the remaining loan balance, giving the owner room to accept a discounted cash offer.
Free and Clear: Owned outright, with no mortgage or deed of trust secured against the property.
Inherited Property: Real estate received through an estate. Heirs frequently prefer a fast, clean sale over holding and maintaining the asset.

Records, title & ownership

17 terms

Parcel: A single legally defined piece of real property. The atomic unit of county property records.
APN (Assessor's Parcel Number): The unique identifier a county assessor assigns to a parcel for taxation and record-keeping.
Deed: The instrument that transfers ownership of real property from one party to another, recorded with the county.
Warranty Deed: A deed in which the seller guarantees clear title and agrees to defend against future claims.
Quitclaim Deed: A deed transferring whatever interest the grantor holds, with no warranty that the title is good.
Chain of Title: The recorded history of ownership transfers for a parcel, from the earliest deed to the present owner.
Title Search: A review of public records to confirm ownership and reveal liens, encumbrances, or defects.
Title Insurance: A policy protecting a buyer or lender against financial loss from defects in the title.
Cloud on Title: Any claim, lien, or encumbrance that casts doubt on clear ownership and can block a sale.
Lien: A legal claim against a property that secures a debt. Liens generally must be cleared before clean title passes.
Mechanic's Lien: A lien filed by a contractor or supplier for unpaid work or materials furnished to the property.
Encumbrance: Any claim or restriction on a property, including liens, easements, and restrictive covenants.
Easement: A right allowing another party to use part of a property for a specific purpose, such as access or utilities.
County Recorder: The county office that records deeds, mortgages, liens, and foreclosure notices. The primary free source of off-market signals.
County Assessor: The county office that values property for tax purposes and maintains parcel and ownership data.
Situs Address: The physical location of the property, as distinct from the owner's mailing address. The gap between the two identifies absentee owners.
Owner of Record: The person or entity shown as the current legal owner in county records.

Deal analysis

15 terms

ARV (After Repair Value): The estimated market value of a property once planned repairs and renovations are complete.
MAO (Maximum Allowable Offer): The highest price an investor can pay and still hit a target profit after repair costs, holding costs, and fees.
70% Rule: A screening heuristic: offer no more than 70% of ARV minus repair costs. A filter for triage, not a valuation method.
Comps (Comparable Sales): Recent sales of similar, nearby properties used to estimate a subject property's value.
Rehab Budget: The itemized estimate of repair and renovation costs required to reach ARV.
Holding Costs: Ongoing costs of owning a property before resale: taxes, insurance, utilities, and loan interest.
Closing Costs: Fees paid at closing, including title, escrow, recording, lender charges, and transfer taxes.
Equity: The difference between a property's market value and the debt secured against it.
Forced Appreciation: Value created by the owner's actions -- renovation, better management, or a higher-and-better use -- rather than by the market.
Cash Flow: Rental income remaining after all operating expenses and debt service are paid.
NOI (Net Operating Income): Rental income minus operating expenses, calculated before debt service and income taxes.
Cap Rate: Net operating income divided by purchase price. A yield measure used to compare income properties.
Cash-on-Cash Return: Annual pre-tax cash flow divided by the cash actually invested, expressed as a percentage.
DSCR (Debt Service Coverage Ratio): Net operating income divided by annual debt service. Lenders use it to judge whether a property covers its loan.
LTV (Loan-to-Value): The loan amount divided by the property's value, expressed as a percentage.

Wholesaling & contracts

14 terms

Wholesaling: Putting a property under contract at a discount and assigning that contract to an end buyer for a fee. Several states regulate the practice; check your state's rules.
Assignment of Contract: Transferring your rights and obligations under a purchase contract to another buyer.
Assignment Fee: The wholesaler's profit: the difference between the contracted purchase price and what the end buyer pays.
Double Close: Two back-to-back closings -- seller to wholesaler, then wholesaler to end buyer -- used instead of an assignment.
Purchase and Sale Agreement (PSA): The contract that sets the price, terms, and contingencies governing a sale.
Earnest Money: A deposit demonstrating the buyer's good faith, credited at closing or forfeited according to the contract.
Contingency: A condition that must be satisfied for a contract to proceed, such as financing, inspection, or clear title.
Due Diligence Period: A contractual window during which the buyer may inspect, verify, and cancel without penalty.
Option Contract: A contract giving the right, but not the obligation, to buy at a set price within a defined period.
End Buyer: The party who ultimately purchases the property from the wholesaler.
Cash Buyer: A buyer purchasing without mortgage financing, typically an investor able to close quickly.
Proof of Funds: Documentation showing a buyer holds sufficient cash to close the transaction.
Escrow: A neutral third party that holds funds and documents until every closing condition is met.
Title Company: The company that searches title, issues title insurance, and often handles the closing.

Financing

11 terms

Hard Money Loan: Short-term, asset-based financing from a private lender, underwritten on the property rather than the borrower's income.
Private Money: Loans from individuals rather than institutions, with terms negotiated directly between the parties.
Seller Financing: The seller carries the note and the buyer pays the seller over time, instead of obtaining a bank loan.
Subject-To: Buying a property while the seller's existing mortgage stays in place. The lender's due-on-sale clause is the principal risk.
Wraparound Mortgage: Seller financing that wraps around an existing loan which the seller continues to pay.
Bridge Loan: Short-term financing that covers the gap until permanent financing or a sale is completed.
DSCR Loan: An investor loan underwritten on the property's cash flow rather than the borrower's personal income.
Points: Prepaid interest, where one point equals 1% of the loan amount, used to lower the rate or compensate the lender.
Cash-Out Refinance: Refinancing for more than the current balance and taking the difference as cash.
HELOC: A home equity line of credit: a revolving line secured by the equity in a property.
BRRRR: Buy, Rehab, Rent, Refinance, Repeat. A strategy for recycling the same capital into successive properties.

Outreach & compliance

10 terms

Skip Tracing: Finding current phone, email, or mailing information for an owner whose public-record contact details are stale.
Driving for Dollars: Physically driving neighborhoods to spot distressed or vacant houses, then looking up the owner of record.
Direct Mail: Mailing letters or offers to a targeted list of owners, still one of the most common off-market outreach channels.
Cold Calling: Phoning property owners directly. Governed by the TCPA and federal and state Do Not Call rules.
List Stacking: Overlaying several distress lists to surface owners who appear on more than one, who are usually the most motivated.
TCPA: The Telephone Consumer Protection Act, 47 U.S.C. 227, which restricts autodialed and prerecorded calls and texts. Compliance is the caller's responsibility.
Do Not Call (DNC) Registry: The federal registry of telephone numbers that may not be contacted for telemarketing purposes.
FCRA: The Fair Credit Reporting Act, 15 U.S.C. 1681, which limits how consumer-report data may be obtained and used.
DPPA: The Driver's Privacy Protection Act, 18 U.S.C. 2721, which restricts the use of motor-vehicle record data.
NCOA: The USPS National Change of Address database, used to update stale mailing addresses on an owner list.

Strategy & property types

7 terms

Off-Market: Property not listed on the MLS or public marketplaces. Found through public records and direct owner outreach.
MLS (Multiple Listing Service): The broker-run database of listed properties. The on-market counterpart to off-market sourcing.
SFR (Single-Family Residence): A standalone one-unit home, the most common asset class for new investors.
Multifamily: A property with multiple residential units, from a duplex up to a large apartment building.
Fix and Flip: Buying a distressed property, renovating it, and reselling it for a profit within a short horizon.
Buy and Hold: Acquiring property to rent long term, targeting cash flow and equity growth rather than a quick resale.
1031 Exchange: A like-kind exchange under Internal Revenue Code section 1031 that defers capital-gains tax when sale proceeds are reinvested in another investment property, subject to strict deadlines.

On sources

Foreclosure procedure, redemption periods, deficiency judgments, and wholesaling rules are set by state law and vary. Statutes referenced above: the TCPA (47 U.S.C. 227), the FCRA (15 U.S.C. 1681), the DPPA (18 U.S.C. 2721), and IRC section 1031. Confirm your state's rules before acting; this is reference material, not legal advice.

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The vocabulary, all of it.