FRECI_17-1 - 2 Copyright, 2005 7 Original purchase price:...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Florida Real Estate Commission Course I Pre-Licensing Course for Sales Associates Session 17 – Lecture 1 Real Estate Investments and Business Opportunity Brokerage Copyright, 2005 2 Lecture Preview What will you learn from this lecture? Discuss important investment terminology Copyright, 2005 3 Vocabulary Terms Appreciation Capital gain (loss) Cash flow Equity Leverage Liquidity Tax shelter Copyright, 2005 4 Investment Terminology Cash flow Amount remaining after deducting all operating and business expenses BTCF (before tax cash flow) ATCF (after tax cash flow) Amount remaining after deducting all operating and business expenses AND tax liability Copyright, 2005 5 Investment Terminology Leverage The use of mortgage funds to help finance a capital investment Note rate Return 6% 6% 8% 8% < > Copyright, 2005 6 Investment Terminology Capital gain (or loss) The difference between the purchase price and net sale price (after deducting sale-related expenses)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 2 Copyright, 2005 7 Original purchase price: $125,000 Sale price: Brokerage fee: Closing costs: $195,000- 12,000- 8,500 Orig. purchase price: - 125,000 $49,500 Copyright, 2005 8 Investment Terminology Appreciation Equity The difference between the sale price (or current market value) and all mortgage debts An investors capital (cash) investment! An increase in value above and beyond the effect of any physical improvements Copyright, 2005 9 Investment Terminology Liquidity The ability to sell an asset quickly for market value Stocks/Bonds Real estate Copyright, 2005 10 Investment Terminology Risk Tax shelter The possibility that actual outcomes will vary from what was expected when the asset was purchased A legal method by which to reduce or avoid tax liabilities Copyright, 2005 11 End of Lecture At the conclusion of this lecture, complete Quiz 17-1 in the course....
View Full Document

Page1 / 2

FRECI_17-1 - 2 Copyright, 2005 7 Original purchase price:...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online