What is a “spread?”
In real estate investing, a "spread" is the difference between the property’s fair market value and the total sum invested. If it sounds complicated, here’s an example. If you buy a house that is worth $100,000 for $70,000, the spread is:
$100,000 Fair Market Value - $70,000 Purchase Price = $30,000 Spread
Similarly, if you buy a house that will be worth $100,000 after $10,000 in repairs for $60,000, the spread is:
$100,000 Fair Market Value - $10,000 Repairs - $60,000 Purchase Price = $30,000