Real Estate Investing Glossary

Appreciation

The increase in a property value over time. Real estate appreciation is one of the two main ways investors make money, alongside rental income.

Accredited Investor

An investor who meets SEC income or net worth requirements. Many traditional real estate investments require accredited status. Pie Assets does not require accredited investor status.

Amortization

The process of paying off a loan through regular payments over time. Each payment covers both principal and interest.

Cap Rate (Capitalization Rate)

The annual return on a property calculated by dividing net operating income by property value. A higher cap rate generally means a better return. Example: a property generating $10,000/year worth $100,000 has a 10% cap rate.

Cash Flow

Money remaining after all property expenses are paid from rental income. Positive cash flow means the property earns more than it costs. This is the foundation of passive income real estate investing.

Cash on Cash Return

Annual cash flow divided by total cash invested. Measures the return on actual cash invested rather than total property value.

Closing Costs

Fees paid when finalizing a real estate transaction, including title insurance, appraisal fees, and loan origination fees. Typically 2-5% of the purchase price.

Depreciation

A tax deduction that allows property owners to deduct the cost of a property over time. One of the key tax advantages of real estate investing.

Down Payment

The upfront cash payment when buying a property. Traditional real estate requires 20% down. With Pie Assets fractional investing, no large down payment is required.

Due Diligence

The research and analysis done before investing in a property. Includes inspections, financial analysis, and market research.

Equity

The difference between a property value and what is owed on it. As you pay down a mortgage and the property appreciates, equity grows.

Escrow

A neutral third party that holds funds during a real estate transaction until all conditions are met.

Fractional Real Estate Investing

Owning a fraction or share of a property instead of the whole thing. Platforms like Pie Assets allow investors to buy fractional shares of income-generating properties with low minimums, no landlord duties, and no accredited investor status required.

Fix and Flip

A strategy where investors buy undervalued properties, renovate them, and sell for a profit. Requires significant capital and active involvement.

Foreclosure

When a lender takes possession of a property because the borrower failed to make mortgage payments. Foreclosed properties can sometimes be purchased below market value.

Gross Rental Yield

Annual rental income divided by property value, expressed as a percentage. A quick way to compare potential returns across properties.

House Hacking

Buying a multi-unit property, living in one unit, and renting the others. The rental income helps pay the mortgage.

Housing Choice Voucher Program (Section 8)

A federal program that helps low-income families afford housing. The government pays rent directly to property owners on behalf of qualifying tenants, providing investors with stable, government-backed income.

Income Property

A property purchased specifically to generate rental income. This is the foundation of Pie Assets investment model.

Interest Rate

The percentage charged on a loan. Higher interest rates increase mortgage costs and can affect property investment returns.

Landlord

A property owner who rents to tenants. With Pie Assets fractional investing, you earn rental income without any landlord responsibilities.

Leverage

Using borrowed money to increase potential returns. Real estate is one of the few asset classes where leverage is commonly used by everyday investors.

Liquidity

How quickly an asset can be converted to cash. Real estate is generally less liquid than stocks, which is a key consideration for investors.

Net Operating Income (NOI)

Rental income minus operating expenses (not including mortgage payments). A key metric for evaluating investment property performance.

Net Rental Yield

Annual rental income minus expenses, divided by property value. More accurate than gross yield as it accounts for costs.

Passive Income

Money earned with minimal active effort. Rental income from Pie Assets fractional investments is truly passive - professional managers handle everything.

Property Management

The operation and oversight of a rental property. Includes finding tenants, collecting rent, and handling maintenance. Pie Assets handles all property management for investors.

Portfolio Diversification

Spreading investments across multiple properties or markets to reduce risk. Fractional investing makes diversification accessible to all investors.

REIT (Real Estate Investment Trust)

A company that owns income-generating real estate. REITs trade on stock exchanges like stocks. Unlike fractional investing, REITs do not give investors ownership of specific properties or voting rights.

Rental Income

Money paid by tenants to property owners in exchange for occupying a property. With Pie Assets, rental income is distributed to investors proportionally based on their ownership share.

ROI (Return on Investment)

Total return as a percentage of the amount invested. Pie Assets targets up to 15% annual ROI from rental income and property appreciation combined.

Section 8

See Housing Choice Voucher Program. A federal rental assistance program providing government-backed income to property investors.

Single Family Home

A standalone residential property designed for one family. The primary property type in Pie Assets portfolio.

Vacancy Rate

The percentage of time a property sits empty without a tenant. Lower vacancy rates mean more consistent rental income.

Voting Rights

The ability for investors to vote on key property decisions. Pie Assets is unique in giving fractional investors voting rights on renovations, refinancing, and selling decisions.

Wholesaling

Finding undervalued properties and assigning the purchase contract to another buyer for a fee. Requires little capital but significant time and hustle.