The Unique Real Estate Blog

Below are some basic but key terms to understand when considering commercial real estate investments. These terms will help you in your conversations with brokers, owners, appraisers and lenders.

ARV: After repaired value of the piece of property or land.

ADV: After developed value. The new assessed value of the land after the development is completed.

Appraisal: A qualified estimate of the value of land or buildings by a professionally trained person (appraiser).

Class A Building: A commercial building that is esthetically pleasing on the outside, with superior building grades on the shell and inside.

Mixed use building: A building that contains retail, offices and / or residential housing in the same building.

Lead: The information that a piece of land or a building is up for sale.

Strip Mall: A set of retail shops that share a roof, but all have their own separate entrances to the outside.

Shopping Center: A group of retail shops that share a roof that has one or more common entrances from the outside, with their individual doors opening into the common indoor area.

Plat Map: A map that show the property outline of each parcel, number of acres, and name of the land owner. Additional information include on a plat map are the township name, sections numbers, range numbers, lakes, and rivers.

Plot Map: A map of individual lots for sale in a development.

Planning Commission: The County or city or township of elected officials who determine if a development or redevelopment can be done, and what special requirements are needed to complete the project.

Variances: When special circumstances are permitted for an existing building or new development that are different form the existing code. Zoning: The type of development that can be done on a piece of land: agricultural, residential, high-rise, multi unit, or commercial.

Agricultural: A piece of land that is used for the growing of food, or the grazing of animals.

Residential: A place where people live. The zoning can be single family (R1), multi family (R2 -4), Town houses, or Multi unit (apartments or condominiums).

Multi-Family: A multi family dwelling can be a duplex, a tri-plex, a, or an apartment or condominium.

Duplex: Two homes with a common wall, and one roof. Each unit is accessed by a separate front door, and usually has separate meters for water and electricity/gas.

Tri-plex: Three homes with common walls, and one roof. Each unit is accessed by a separate front door, and usually has separate meters for water and electricity/gas.

Four-plex: Four homes with common walls, and one roof. Each unit is accessed by a separate front door, and usually has separate meters for water and electricity/gas.

Condominium: A group of homes stacked on top of each other with a common entrance door and individual front doors. Like an apartment, but the unit is bought and the owner holds a deed. There is one roof and common areas that are maintained by the entire group.

Town House: A group of houses that share a common wall with two neighbors. Usually has two stories and is many times a larger unit than an apartment.

Contamination: The pollutants in the ground (dirt) that will need to be cleaned up before any construction can occur.

Terms: The agreement between two parties of how long, how much, and at what interest rate a note (loan) will be paid.

LOI: Letter of Intent. The written intention to purchase a tract of land or a building stating the price and conditions that the buyer would like to have. This is a non-binding agreement that leads to formal negotiations.

Commercial Real Estate is a great vehicle for investors to explore. There are a lot of different niches real estate investors can choose to specialize in. No matter which commercial real estate avenue you choose to look into, you will benefit from knowing these key terms.
Anthony Seruga and Yolly Bishop of Maverick Real Estate Investments, Inc. work with builders, developers and other players in the commercial real estate industry to acquire and develop properties. They use progressive investment strategies that have proved extremely profitable. In addition to their own deals, they teach both seasoned and inexperienced investors how to be big players in the game. Visit the website for more info.