If you’re not a real estate nerd like me, all the fancy terms that make simple things sound complicated can leave you with hours of additional research and may even delay you dipping your toes into your first investment property. After years of managing properties and helping investors, I’ve realized something: this stuff isn’t rocket science. We just make it sound that way.

So I did something about it. My team and I just launched a no-nonsense glossary on the Sovereign website. It’s everything I wish someone had told me when I started, plus the trends, minus the confusing industry speak.

Let me share some real-world examples of terms I use every day, and what they really mean:

Cash Flow. This one’s simple – it’s what’s left in your bank account after you’ve paid all the bills on your property. I can’t tell you how many times I’ve seen smart people buy properties that look great on paper but bleed money every month. Trust me, positive cash flow makes life a lot less stressful.

The BRRRR Method.  It is a fancy name for a pretty straightforward strategy: Buy a place, fix it up, rent it out, refinance to get your money back, and then do it all over again. I’ve watched clients use this to build some serious property portfolios. It’s like playing Monopoly but with real money.

Cap Rate. This one used to make some of my clients’ eyes glaze over until I explained it like this: high risk, high reward, low risk, low reward.  It’s a metric used to compare different properties fairly. 

Value-Add Properties. These are the diamonds in the rough. They’re not pretty at first, but with some work, they can turn into real gems. I love these projects because you can force appreciation instead of waiting around for the market to do its thing.

Here’s what you need to know about real estate: No, you don’t need to talk like a professor to be successful, but you need to consult and hire a professional AND you need to understand how things work in the real world. That’s why we created this glossary. It’s free, it’s on our website, and it explains everything in plain English.

I use these terms every day when working with property owners. Not because I like using fancy words, but because understanding them helps me make better decisions. And better decisions mean better returns. The best clients are the most informed clients. 

If you’re not getting the return on your investment that you deserve, reach out and we’ll be happy to see what we can do for you. My team and I love talking about this – especially when we can help people avoid the mistakes we’ve seen (and sometimes made ourselves) over the years.

Dedicated to helping you #LiveSovereign,

Karen Hatcher, CPM®