1031 Exchange:

A 1031 exchange, also known as a like-kind exchange or a tax-deferred exchange, is a provision in the United States Internal Revenue Code (Section 1031) that allows real estate investors to defer capital gains taxes on the sale of investment or business properties. It enables the investor to exchange one property for another similar property while deferring the recognition of taxable gain.

The key principle of a 1031 exchange is that the transaction involves the exchange of properties that are considered “like-kind.” In this context, “like-kind” does not refer to the physical characteristics or quality of the properties but rather to their nature or character, such as exchanging one investment property for another investment property. Therefore, a wide range of real estate properties can qualify for a 1031 exchange, including residential, commercial, and vacant land.


Acquisition & Development Loans:

A type of financing specifically tailored for the initial stages of a construction project. These loans are used to finance the purchase of raw land or property for development purposes. They cover the costs associated with acquiring the land and preparing it for construction, including site improvements, infrastructure development, and obtaining necessary permits and approvals.


An appraisal is a professional assessment of the value of a property, typically conducted by a licensed and certified real estate appraiser. The purpose of an appraisal is to provide an objective opinion of a property’s worth based on various factors and market conditions.



Stands for Consolidation, Extension, and Modification Agreement. It is a type of agreement commonly used in New York State for refinancing residential mortgages. CEMA allows borrowers to save on certain mortgage recording tax when they refinance their existing mortgage with a new lender. In the context of a purchase, it is referred to as a Purchase CEMA.


In the context of real estate, a closing refers to the final step in the process of buying or selling a property. It is the culmination of the transaction where the legal ownership of the property is transferred from the seller to the buyer.


A cooperative, commonly referred to as a co-op, is a type of housing arrangement in which individuals or households collectively own and manage a building or a group of buildings. In a co-op, residents are both shareholders and tenants, as they own shares in the cooperative corporation that owns the property and have the right to occupy a specific unit within the cooperative.

Co-op Shareholder:

In a cooperative (co-op) housing arrangement, a co-op shareholder is an individual who owns shares in the cooperative corporation. Shareholders are considered the owners of the cooperative, collectively owning and controlling the entire property or building.

Commercial Real Estate:

Commercial real estate refers to properties that are primarily used for business purposes rather than residential purposes. These properties are typically intended for commercial activities such as office spaces, retail stores, industrial facilities, hotels, warehouses, and multi-family apartment buildings.

Commercial Lender:

A commercial lender is a financial institution or entity that provides loans and financing specifically for commercial purposes. Commercial lenders offer various types of loans to businesses, such as term loans, lines of credit, commercial mortgages, and equipment financing. These loans are typically used to fund business operations, expansion, acquisitions, working capital, or specific projects.

Common Charge:

Common Charges are monthly fees shared by all unit owners to pay for a condominium’s common expenses including operating and building maintenance costs.

Construction-Only Loans:

A construction-only loan, also known as a short-term or interim loan, is a type of financing specifically designed to provide funds for the construction phase of a project. It is a short-term loan that covers the expenses associated with the construction of a property, including labor, materials, permits, and other construction-related costs.

Construction-Permanent Loans:

A construction-to-permanent loan is a type of financing that combines the construction phase and long-term mortgage into a single loan package. It provides funds to finance the construction of a property and seamlessly transitions into a permanent mortgage once the construction is complete.

Contract Deposit:

A contract deposit, also known as an earnest money deposit or a down payment, is a sum of money paid by a buyer to the seller as a sign of good faith and commitment to a real estate transaction. It is typically made at the time the purchase agreement or contract is signed.


Debt to Income Ratio:

The debt-to-income ratio (DTI) is a financial metric used to measure an individual’s or a household’s level of debt relative to their income. It is a commonly used tool by lenders to assess a borrower’s ability to manage and repay debt. The DTI ratio is calculated by dividing the total monthly debt payments by the gross monthly income and is typically expressed as a percentage. It provides an indication of the proportion of income that is being used to service debt obligations. The lower the DTI ratio, the more favorable it is considered from a lender’s perspective.

Due Diligence:

Due diligence refers to the process of conducting a comprehensive and thorough investigation or examination of a business, investment opportunity, or any other subject matter before making a decision or entering into a transaction. It involves gathering relevant information, analyzing data, and assessing potential risks and benefits associated with the matter at hand. Due diligence aims to ensure that all necessary information is obtained and evaluated to make informed decisions and mitigate potential risks.


Escrow Deposit:

An escrow deposit, also known as an earnest money deposit or simply a deposit, is a sum of money provided by a buyer to demonstrate their intention to purchase a property in a real estate transaction. It is typically paid when the buyer submits an offer or signs a purchase agreement.

The purpose of an escrow deposit is to show the seller that the buyer is serious about purchasing the property and to provide assurance that the buyer will fulfill their obligations under the purchase agreement. The deposit is held in an escrow account, typically by the seller’s attorney, until the closing of the transaction.

Estate Planning:

Estate planning is the process of making arrangements and decisions to manage and distribute your assets and wealth during your lifetime and after your death. It involves creating a comprehensive plan that outlines your wishes regarding the distribution of your estate, care for dependents, and management of your affairs in the event of incapacitation.


Financial Statement:

A financial statement is a formal record or report that provides an overview of an individual’s, company’s, or organization’s financial activities and position. It presents key financial information in a structured format, allowing stakeholders to assess the financial health, performance, and stability of the entity.

FIRPTA Withholding (FIRPTA):

Stands for the Foreign Investment in Real Property Tax Act. It is a U.S. federal tax law that imposes certain withholding requirements on the sale of real estate by foreign individuals or entities. Under FIRPTA, when a foreign person sells a U.S. real estate property, the buyer or the buyer’s agent is required to withhold a portion of the sales proceeds and remit it to the Internal Revenue Service (IRS) as a form of tax withholding. The purpose of this withholding is to ensure that the foreign seller pays any applicable taxes on the capital gains realized from the sale of the U.S. property. The current withholding rate under FIRPTA is generally 15% of the gross sales price. However, there are certain exemptions and reduced withholding rates that may apply depending on the specific circumstances, such as when the sales price is below a certain threshold or the buyer intends to use the property as a personal residence.

Flip Tax:

A flip tax, also known as a transfer fee or transfer tax, is a fee imposed by a cooperative (co-op) or condominium association on the sale or transfer of a unit within the housing community. The flip tax is typically calculated as a percentage of the gross or net sale price or a flat fee per unit.


Foreclosure is a legal process in which a lender takes possession of a property from a borrower who has defaulted on their mortgage payments. It is typically initiated by the lender as a means to recover the outstanding loan balance when the borrower fails to make timely mortgage payments.


Investment Bank:

A bank that provides financial services for corporate and institutional customers, such as investing, raising capital, and arranging mergers and acquisitions.


Joint Venture Financing:

Created through an affiliation in which both parties agree to share capital, risks and rewards of the venture.


Lien Search:

A lien search is a process of investigating and examining public records to determine if there are any outstanding liens or encumbrances on a property. A lien is a legal claim or right held by a creditor against a property as security for a debt or obligation. Conducting a lien search is an important step in real estate transactions to identify any existing liens on the property, as they can affect the ownership and transfer of the property.


Maintenance Fee:

A maintenance fee, also known as a monthly fee or carrying charge, is a recurring payment that owners of cooperative (co-op) or condominium units are required to pay to cover the operating expenses and maintenance costs of the housing community. These fees are typically determined by the cooperative or condominium association and are used to cover various expenses associated with the upkeep and management of the property.

Mezzanine Lender:

A mezzanine lender is an entity or institution that provides financing in the form of mezzanine loans. Mezzanine lenders specialize in offering this type of financing to companies seeking additional capital beyond what is available through traditional senior debt or equity financing.

Mezzanine Loan:

A mezzanine loan is a type of financing that sits between senior debt and equity in the capital structure of a company. It is called “mezzanine” because it occupies a middle position. Mezzanine loans are often used to fund expansion, acquisitions, or buyouts.

Mini-Perm Loans:

A mini-perm loan, short for “mini-permanent loan,” is a type of financing that provides intermediate-term funding for a real estate project. It bridges the gap between short-term construction financing and long-term permanent financing. The term “mini-perm” reflects the temporary nature of the loan, which typically lasts for a fixed period, usually between three to five years.


National Bank:

A national bank is a financial institution that is chartered and regulated by the government of a specific country to provide various banking services. These banks are often considered to be major players in the country’s banking system and operate on a national scale, serving individuals, businesses, and other financial institutions.


Post-Closing Liquidity:

Post-closing liquidity refers to the amount of cash or easily accessible funds that a buyer has available after completing a real estate transaction. It represents the buyer’s financial flexibility to handle any immediate expenses or contingencies that may arise after the closing of the property purchase.

Power of Attorney:

A power of attorney (POA) is a legal document that grants someone, known as the “agent” or “attorney-in-fact,” the authority to act on behalf of another person, known as the “principal,” in legal, financial, or other specified matters. The principal gives the agent the power to make decisions and take actions on their behalf, as outlined in the power of attorney document.


Being pre-approved refers to the process in which a lender assesses a borrower’s financial information and creditworthiness to determine the maximum amount they are willing to lend for a mortgage or other types of loans. Pre-approval provides potential buyers with an estimate of the loan amount they can qualify for, giving them a better idea of their budget and enhancing their credibility when making an offer on a property.


Being pre-qualified is an initial step in the mortgage or loan application process in which a lender assesses a borrower’s basic financial information to provide an estimate of the loan amount they may qualify for. Pre-qualification gives potential borrowers a preliminary idea of their borrowing power and can help guide their home search or financial planning.

Proprietary Lease:

A proprietary lease refers to a legal document that grants an individual or entity the right to occupy and use a specific property, typically a unit within a cooperative housing corporation.


Real Estate:

A piece of land and the property – such as a house, office building, apartment, strip center or warehouse – that sits on it.

Recording Fee:

A recording fee is a fee charged by the government or county recorder’s office to officially record or register a real estate document, such as a deed, mortgage, or lien, in the public land records. It is typically paid by the party responsible for submitting the document for recording, which is often the buyer or the lender in the case of a mortgage.

Regional Bank:

Regional banks, as defined by the Federal Reserve, are banks with $10 billion to $100 billion in assets. They’re referred to as regional banks because they’ve historically operated within a specific region of the country, but today, that’s not always the case. They differ from community banks and national banks in their size in terms of assets, not in the area they serve or the services they offer.

Renovation & Rehabilitation Loans:

Renovation and rehabilitation loans are types of financing specifically designed to fund the renovation, improvement, or rehabilitation of an existing property. These loans provide borrowers with the necessary funds to make repairs, upgrades, or structural changes to enhance the functionality, aesthetics, or value of the property.



In the context of real estate, a sponsor typically refers to an individual or entity that initiates and leads a real estate investment project, particularly in the case of new development condominiums or commercial real estate ventures.  The sponsor is responsible for sourcing the investment opportunity, securing financing, overseeing the project’s execution, and ultimately seeking a return on investment for themselves and other investors.

Stock Certificate:

A stock certificate is a physical document that represents ownership of shares in a corporation. It serves as evidence that an individual or entity owns a specific number of shares in a particular corporation. Co-op shareholders will receive a stock certificate and a proprietary lease at the closing of their units.


Tax Abatement:

A tax abatement is a program or policy implemented by local governments to provide temporary or permanent reductions in property taxes for certain properties or property owners. The purpose of a tax abatement is typically to incentivize economic development, encourage investment, promote affordable housing, or revitalize specific areas within a jurisdiction owners of cooperative units and condominiums who meet the eligibility requirements for the Cooperative and Condominium Property Tax Abatement can have their property taxes reduced. The amount of the abatement is based on the average assessed value of the residential units in the development.

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