3 More Acronyms an Investor Should Know
May 13, 2015
Every industry has a lingo. Every profession has a different language that they speak, most of which is done through acronyms. The same goes for a real estate investor. Real estate investors use acronyms all of the time to communicate faster and more efficiently.
In today’s post I’m going to cover 3 more acronyms that every real estate investor should know. You can click here to view the previous 3 acronyms that I covered.
EM- Earnest Money
Your earnest money is basically your down payment. The amount of earnest money you can put down on a house can range anywhere from $10 to the full purchase price of the property. I have actually used $10 for earnest money before, and I’ve also had sellers request specific amounts. It all depends on the situation.
I normally always put the earnest money into escrow with the title company. This prevents me from having to rely on a third party to take care of the money. Also, always have an escape clause in your contract to prevent the loss of any funds, should the deal fall through.
JV- Joint Venture
A joint venture is when you, as a real estate investor, work on a deal with another individual. The other party could be another real estate investor, a builder or just somebody looking to make a quick buck. They don’t even have to live in this country! I’m currently working on hammering out a joint venture between myself and a person in France.
Joint ventures are popular in the flipping market because the two parties are only together for one deal. Normally one person will pay for the property and the other is in charge of the demo and construction. There is no set rate of return for each individual. It is whatever is agreed upon when the joint venture is started.
EMP
EMP stands for electrical, mechanical and plumbing. A successful real estate investor has a great EMP team and strategy. If you don’t have a few licensed electricians, mechanics or handymen, and plumbers in your contacts list then you need to get that team assembled! It won’t only save you time but money as well.
Your EMP specialists all require special licensing and typically all work on rehab projects at the exact same time. This makes it easy to get a lot of important work done at the same time, instead of having a “jack of all trades” take three times longer to perform the same amount of work.
