Real Estate Investing Terminology 101

FEBRUary 08, 2024
Written by John Makarewicz


Are you eager to dive into the world of real estate investing but feeling overwhelmed by terms like equity, leverage, and ROI? Don’t worry, you’re not alone. We’re here to demystify the jargon and transform it into understandable language, so you can become a confident real estate investor faster than you ever thought possible!


First up, let’s tackle some of the core terms that form the backbone of real estate investing.

1. Equity: Think of equity as your piece of the pie. It’s the difference between what your property is worth and what you owe on it. As you pay down your mortgage, your slice of the pie gets bigger. Sweet, right?

2. Leverage: In real estate, leverage is using borrowed capital (like a mortgage) to increase the potential return of an investment. It’s like using a lever to lift something heavy – a little effort goes a long way.

3. ROI (Return on Investment): This is how you measure the bang you’re getting for your bucks. It’s the profit from your investment compared to its cost. High ROI? You’re on to a winner.

4. Cash Flow: This is your investment’s paycheck. It’s the net income from a property after all the bills are paid, including that pesky mortgage and maintenance costs. Positive cash flow means more money in your pocket.

5. Appreciation: This is the real estate version of your property ‘growing up’. Over time, most properties increase in value, or appreciate, making your investment worth more than when you bought it.

6. Depreciation: Now, this might sound bad, but it’s actually a tax perk for real estate investors. It lets you deduct the costs of buying and improving a property over its useful life, reducing your taxable income.


Having covered the basics, it’s time to venture further into the real estate investment landscape. The diversity in property types and investment strategies is vast, from fix-and-flips to wholesaling and long-term rentals. Each method comes with its own set of terms and strategies, expanding the vocabulary and opportunities in real estate investing.



Unlocking Multifamily Investment Opportunities

This is where the opportunities start getting even more exciting – with multi-family real estate investments. These properties, which feature multiple residential units, offer a unique advantage for those looking to scale their investment portfolio. The beauty of multi-family properties lies in their potential for multiple income streams, providing a more stable and potentially lucrative investment.

At Faris Capital Partners, we specialize in identifying and capitalizing on these multi-family investment opportunities. Our expertise isn’t just in finding these gems; it’s in nurturing them to realize their full potential. With a keen eye for value and a hands-on approach to management, we ensure that each investment we undertake is positioned for success.




With a solid understanding of the basics and the exciting prospects that multi-family properties offer, you’re now better equipped to navigate the investment landscape.

As part of the Faris Capital Partners family, we’re here to guide you through the intricacies of multi-family real estate investments. Our expertise in uncovering and maximizing these opportunities can be the catalyst for your investment journey. Ready to take the next step in expanding your investment portfolio? Let’s explore the possibilities together and pave the way to your real estate success.



Interested in learning more about Multifamily Apartment Investing? Download our FREE E-book – The Full Out Apartment Investor

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