Acronyms

Learn about common house flipping acronyms, abbreviations and formulas used by house flippers.
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House Flipping Acronyms

#   A   B   C   D   E   F   G   H   I   J   K   L   M   N   O   P   Q   R   S   T   U   V   W   X   Y   Z

A

After Repair Value (ARV) ‚Äď The after repair value or 're-sale value' is the estimated value of the property after renovations are made to the property. ¬†The after repair value is calculated based upon comparable sales nearby the subject property.

Learn How to Calculate the After Repair Value

B

BRRRR - BRRRR is an acronym for a real estate investment strategy which stands for Buy, Rehab, Rent, Refinance & Repeat.  BRRRR is the process of buying a distressed property, rehabbing the property, renting the property & refinancing the purchase into a long term conventional loan.  Upon refinance, the investor cashes out the equity in the property, and repeats the process by using the profits to purchase another BRRRR deal.

E

EMD (Earnest Money Deposit) - Earnest Money Deposit is money that is provided by the buyer to a seller to show good faith that they are serious about purchasing the property.  Earnest Money is generally between $500 to $1,000, but a buyer can offer a larger earnest money deposit to entice the seller to accept their offer.

F

FHA -  The Federal Housing Administration is a US agency that offers mortgage insurance for federally qualified lenders.

H

HML (Hard Money Lender) - A hard money lender is generally a lender that provides short term (6 to 12 month), interest-only financing for fix-and-flip projects, with relatively high interest rates (10 to 15%).
HOA (Home Owner's Association) - A Home Owner's Association is a private association formed by a neighborhood, subdivision or condominium that creates and enforces rules (covenants) for the association.  HOA's will also manage/maintain common areas, pool facilities, landscaping, utilities, trash collection, etc for the association.
HUD Home - A HUD Home is a foreclosed property that is owned and being sold by Federal Housing & Urban Development (HUD).  If a property that was originally financed through a government-insured loan (FHA) falls into foreclosure, HUD pays-off the defaulted loan, takes possession of the property and sells the property on HUD Home Store.

M

MPP (Maximum Purchase Price) - The Maximum Purchase Price is the maximum price you can offer for a flip property to earn your desired profit.  The Maximum Purchase Price is calculated as follows:

MPP =  After Repair Value - Repairs - Buying Costs - Holding Costs - Selling Costs - Financing Costs - Profit

Learn About the House Flipping Formulas
MLS (Multiple Listing Service) - The MLS is a data service provided by a group of cooperating Real Estate Brokers that hosts & lists real estate properties for sale in a consolidated online database.  The participating Real Estate Brokers share this information in a common local/regional MLS system, which is then provided to consumers on the broker's websites.  

O

OPM (Other People's Money) - Other People's Money is a term commonly used to describe the strategy to utilized other people's money to fund your rehab projects, which will decrease your risk and increase your ROI.

R

REI - REI is a commonly used acronym that stands for Real Estate Investing.
‚ÄčREO - REO is a commonly used acronym that stands for Real Estate Owned. ¬†REO properties are properties that are owned by a bank or lender that were generally acquired through the foreclosure process.

S

SFR - SFR is a commonly used acronym that stands for Single Family Residence.  A single family residence is a property that is zoned for one family.  
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