Florida Real Estate Investment,

POINTS (OR DISCOUNT POINTS)
Points are an up-front fee paid to the lender at the time that you get your loan. Each point equals one percent of your total loan amount. Points and interest rates are inherently connected: in general, the more points you pay, the lower the interest rate you get. However, the more points you pay, the more cash you need up front since points are paid in cash at closing.

DEFAULT
Failure to meet legal obligations in a contract, including failure to make payments on a loan.

HIGHEST AND BEST USE
That use which, at the time of appraising the property, is most likely to produce the greatest net return to the land and/or the building over a given period of time.

REVERSION
A future estate in real property created by operation of law when a grantor conveys a lesser estate than he has. The residue left in the grantor is called a reversion which commences in possession in the future upon the end of a particular estate granted or devised, whether it be freehold or less-than-freehold.

RECORDING FEE
Money paid to an agent for entering the sale of a property into the public records.

FIRST REFUSAL, RIGHT OF
The right of a person to have the first opportunity either to purchase or lease real property.

FEDERAL TAX LIEN
A federal lien which attaches to real property, either if the federal estate tax is not paid, or if the taxpayer has violated the federal income tax or payroll tax laws.

LIQUIDITY
The ability to sell an asset and convert it into cash at a price close to its true value.

JUDICIAL FORECLOSURE
A method of foreclosing upon real property by means of a court supervised sale. After an appraisal, the court determines an upset price below which no bids to purchase will be accepted.

INTEREST RATE
The annual rate of interest on the loan, expressed as a percentage of 100.

ALLODIAL SYSTEM
The free ownership of land by individuals.

ADJUSTABLE RATE MORTGAGE LOANS (ARM)
Loans with interest rates that are adjusted periodically based on changes in a pre-selected index. As a result, the interest rate on your loan and the monthly payment will rise and fall with increases and decreases in overall interest rates. These mortgage loans must specify how their interest rate changes, usually in terms of a relation to a national index such as (but not always) Treasury bill rates. If interest rates rise, your monthly payments will rise. An interest rate cap limits the amount by which the interest rate can change; look for this feature when you consider an ARM loan.

CANTILEVER
A projecting beam or overhanging portion supported at one end only.

CONDOMINIUM
A form of property ownership in which the homeowner holds title to an individual dwelling unit and a proportionate interest in common areas and facilities of a multi-unit project.

DEFERRED COMMISSIONS
Commissions which are earned but not yet fully paid.

PERFORMANCE BOND
A bond, usually posted by one who is to perform work for another, which assures that a project or undertaking will be completed as per agreement or contract.

PRE-APPROVAL
The process of determining how much money a prospective homebuyer or refinancer will be eligible to borrow prior to application for a loan. A pre-approval includes a preliminary screening of a borrower's credit history. Information submitted during pre-approval is subject to verification at application.

GROSS LEASE
A lease of property under which the lessee pays a fixed rent, and the lessor pays the taxes, insurance, and other charges regularly incurred through ownership.

SPECIAL WARRANTY DEED
A deed in which the grantor warrants or guarantees the title only against defects arising during the period of his tenure and ownership of the property and not against defects existing before the time of his ownership.

EASEMENT
A property interest which one person has in land owned by another entitling the holder of the interest to limited use or enjoyment of the other's land.

GROSS LEASE
A lease of property under which the lessee pays a fixed rent, and the lessor pays the taxes, insurance, and other charges regularly incurred through ownership.

MONEY
The cash deposit (including initial and additional deposits) paid by the prospective buyer of real property as evidence of his good faith intention to complete the transaction; called hand money or a binder in some states.

ZONING
The regulation of structures and uses of property within designated districts or zones. Zoning regulates and affects such things as use of the land, types of structure permitted, building heights, setbacks, and density (the ratio of land area to improvement area).

MASTER PLAN
A comprehensive plan to guide the long-term physical development of a particular area.

CAP RATE (CAPITALIZATION RATE)
The percentage selected for use in the income approach to valuation of improved property. The cap rate is designed to reflect the recapture of the original investment over the economic life of the improvement, to give the investor an acceptable rate of return (yield) on the original investment, and to provide for the return on borrowed capital.

FRONTAGE
The length of a property abutting a street or body of water; that is, the number of feet that "front" the street or water.

CALL OPTION
A provision of a note which allows the lender to require repayment of the loan in full before the end of the loan term. The option may be exercised due to breach of the terms of the loan or at the discretion of the lender.

SHOPPING CENTER
A modern classification of retail stores, characterized by off-street parking and clusters of stores, subject to a uniform development plan, and usually with careful analysis given to the proper merchant mix.