Absentee Owner: An absentee owner is a property owner who does not live in or near the property and often hires a property management company to oversee its operations. Absentee owners invest in real estate remotely, relying on property managers to handle tenant relations, maintenance, and other responsibilities.

Adjustable-Rate Mortgage (ARM): An adjustable-rate mortgage (ARM) is a type of loan with an interest rate that can change periodically based on a benchmark index. ARMs typically offer lower initial interest rates compared to fixed-rate mortgages but carry the risk of rate increases over time. Borrowers should carefully consider their ability to handle potential rate fluctuations.

Amortization: Amortization refers to the gradual repayment of a loan through regular payments over a specified period. Each payment includes both principal and interest, with the interest portion typically decreasing over time as the principal balance is reduced. Understanding amortization schedules helps borrowers see how their payments are applied and how quickly they can pay off their loan.

Appraisal: An appraisal is an unbiased professional opinion of a property's value, conducted by a licensed appraiser. It is typically required by lenders during the mortgage approval process to ensure that the loan amount does not exceed the property's worth. Appraisals can also be used for other purposes, such as property tax assessments or determining a fair sale price.

Appreciation: Appreciation is the increase in the value of a property over time. This can occur due to various factors, including market demand, property improvements, and favorable economic conditions. Real estate investors often seek properties that are likely to appreciate, as this can significantly boost their return on investment.

ARV (After Repair Value): ARV stands for After Repair Value, which is the estimated value of a property after it has been renovated or improved. Investors use ARV to determine the potential profitability of a fix-and-flip project. Calculating ARV involves assessing comparable properties in the area that have similar upgrades and features.

Asset: An asset is any resource owned by an individual or entity that is expected to provide future economic benefits. In real estate, assets typically refer to properties or land holdings that can generate income or appreciate in value. Assets are recorded on balance sheets and can include tangible items like buildings and intangible items like property rights.

Balloon Payment: A balloon payment is a large, lump-sum payment due at the end of a balloon loan's term. These loans often have lower monthly payments throughout the term, with the balloon payment covering the remaining principal. Borrowers must be prepared to make the final payment or refinance the loan when it comes due.

Cap Rate: The capitalization rate, or cap rate, is the rate of return on a real estate investment property based on the income it is expected to generate. It is calculated by dividing the property's net operating income (NOI) by its current market value. Cap rates help investors assess the profitability and risk of a potential investment.

Capital Gains: Capital gains are the profits realized from the sale of an asset, such as real estate, when the selling price exceeds the purchase price. These gains are subject to taxation, with rates varying based on how long the asset was held and the investor's tax bracket. Long-term capital gains, from assets held for more than a year, typically have lower tax rates than short-term gains.

Cash Flow: Cash flow refers to the net amount of cash generated by an investment property after all expenses have been paid. Positive cash flow indicates that the property is generating more income than it costs to maintain, while negative cash flow means the opposite. Real estate investors aim for properties with strong, consistent cash flow to ensure a steady income stream.

Cash-on-Cash Return: Cash-on-cash return measures the annual return on an investment relative to the amount of cash invested. It is calculated by dividing the annual pre-tax cash flow by the total cash invested. This metric is useful for evaluating the performance of income-producing properties and comparing different investment opportunities.

Closing Costs: Closing costs are the fees and expenses that buyers and sellers incur during the closing of a real estate transaction. These can include loan origination fees, title insurance, appraisal fees, and attorney fees. Closing costs typically range from 2% to 5% of the property’s purchase price and are paid at the closing table when the property is transferred.

Comparative Market Analysis (CMA): A Comparative Market Analysis (CMA) is a report prepared by real estate professionals to help determine a property's fair market value. It involves comparing the property in question to similar properties that have recently sold in the same area. CMAs consider factors such as location, size, condition, and features to provide an accurate price estimate.

Conforming Loan: A conforming loan is a mortgage that meets the guidelines set by government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac. These guidelines include loan limits, borrower creditworthiness, and property standards. Conforming loans often have lower interest rates and better terms compared to non-conforming loans.

Contingency: A contingency is a condition included in a real estate contract that must be met for the transaction to proceed. Common contingencies include financing, home inspection, and appraisal contingencies. If the conditions are not satisfied, the buyer or seller may have the right to back out of the deal without penalty.

Debt Service Coverage Ratio (DSCR): The debt service coverage ratio (DSCR) is a measure of a property's ability to generate enough income to cover its debt obligations. It is calculated by dividing the net operating income (NOI) by the total debt service. Lenders use DSCR to assess the risk of a loan and determine the borrower's ability to repay.

Debt-to-Income Ratio (DTI): Debt-to-income ratio (DTI) is a measure of a borrower's monthly debt payments relative to their monthly gross income. Lenders use DTI to assess a borrower's ability to manage monthly payments and repay debts. Lower DTI ratios indicate better financial health and can improve a borrower's chances of loan approval.

Deed: A deed is a legal document that transfers ownership of real property from one party to another. It must be executed and delivered according to state laws and typically requires notarization and recording with the county recorder's office. There are different types of deeds, such as warranty deeds and quitclaim deeds, each offering varying levels of protection to the buyer.

Depreciation: Depreciation refers to the gradual decline in the value of a property over time, often due to wear and tear, age, or obsolescence. For tax purposes, real estate investors can deduct depreciation as a non-cash expense, reducing their taxable income. The IRS has specific rules for calculating depreciation based on the property's useful life.

Distressed Property: A distressed property is one that is under foreclosure or being sold by the lender due to the owner's inability to meet mortgage obligations. These properties are often sold at a discount and may require significant repairs. Investors look for distressed properties as opportunities to purchase real estate below market value and potentially renovate and sell for a profit.

Due Diligence: Due diligence is the process of thoroughly investigating a property before finalizing a purchase. This includes reviewing financial records, conducting inspections, and verifying legal documents. Proper due diligence helps investors identify potential risks and ensure that the property meets their investment criteria.

Easement: An easement is a legal right to use someone else's land for a specific purpose, such as access to a road or utility lines. Easements are typically granted through a formal agreement and can be temporary or permanent. They are recorded in public records and can affect property value and usage.

Eminent Domain: Eminent domain is the government's power to take private property for public use, with compensation provided to the owner. This process is used for infrastructure projects like highways, schools, and utilities. Property owners have the right to challenge the compensation amount or the necessity of the taking.

Equity: Equity is the difference between the market value of a property and the amount owed on the mortgage. It represents the owner's financial interest in the property. As the mortgage is paid down and the property appreciates in value, equity increases. Homeowners can leverage their equity for loans or lines of credit for other investments or expenses.

Escalation Clause: An escalation clause is a provision in a lease or purchase agreement that allows for an increase in rent or price under specific conditions. This clause is often used to protect landlords or sellers from inflation or market changes. It outlines the circumstances that trigger the escalation and the formula for calculating the increase.

Escrow: Escrow is an arrangement where a neutral third party holds funds or documents on behalf of the buyer and seller until certain conditions are met. In real estate transactions, escrow accounts are used to hold earnest money deposits and manage the distribution of funds at closing. This process ensures that both parties fulfill their contractual obligations.

Exit Strategy: An exit strategy is a plan for how an investor will divest from an investment property. Common exit strategies include selling the property, refinancing, or holding it for rental income. Having a clear exit strategy helps investors maximize returns and manage risk effectively.

Fair Market Value (FMV): Fair market value (FMV) is the price that a property would sell for on the open market, assuming both buyer and seller are knowledgeable and acting in their best interests. FMV is determined through appraisals, comparative market analysis (CMA), and market conditions. It is a crucial factor in real estate transactions, property tax assessments, and insurance valuations.30

Fix and Flip: Fix and flip is a real estate investment strategy where investors buy properties, renovate them, and then sell them for a profit. The goal is to purchase undervalued or distressed properties, make necessary improvements, and quickly resell them at a higher price. Successful fix and flip projects require careful budgeting, project management, and market analysis.

Flipping: Flipping refers to the process of buying a property, making improvements, and quickly selling it for a profit. Investors who flip properties seek to purchase undervalued or distressed homes, renovate them, and sell them at a higher price. Successful flipping requires careful market analysis, budgeting, and project management.

Foreclosure: Foreclosure is the legal process by which a lender takes possession of a property due to the borrower's failure to make mortgage payments. The property is typically sold at auction to recover the outstanding loan balance. Foreclosures can present opportunities for investors to acquire properties at discounted prices, though they often require significant repairs.

Gross Income: Gross income is the total income generated by a property before any expenses are deducted. It includes rental income, fees, and other revenue streams. Gross income is a key starting point for calculating a property's net operating income (NOI) and assessing its profitability.

Gross Rent Multiplier (GRM): The gross rent multiplier (GRM) is a metric used to evaluate the value of an income-producing property. It is calculated by dividing the property's purchase price by its gross rental income. GRM provides a quick way to compare properties and assess their potential profitability, though it does not account for operating expenses.

Hard Money Loan: A hard money loan is a short-term, high-interest loan secured by real estate. These loans are typically used by investors for property purchases and renovations when traditional financing is not available. Hard money lenders focus on the property's value rather than the borrower's creditworthiness, allowing for faster approval and funding.

Holding Period: The holding period is the amount of time an investor plans to own a property before selling it. The length of the holding period can impact investment strategy, financing options, and tax implications. Short-term holding periods are common in fix-and-flip projects, while long-term holding periods are typical for rental properties.

Homeowner’s Association (HOA): A Homeowner’s Association (HOA) is an organization that governs a subdivision, planned community, or condominium. It sets and enforces rules for properties and residents, often including maintenance of common areas and amenities. HOA fees are collected from homeowners to fund these services, and members must comply with the association's regulations.

HUD-1 Statement: The HUD-1 Settlement Statement is a standard form used to itemize all charges imposed on a borrower and seller for a real estate transaction. It includes detailed information about the loan, fees, and closing costs. The HUD-1 is provided to both parties at closing and helps ensure transparency and accuracy in the transaction.

Income Property: An income property is a real estate investment purchased with the intention of generating rental income. These properties can be residential, such as single-family homes or apartments, or commercial, like office buildings or retail spaces. Investors aim to earn a steady cash flow from rent while benefiting from property appreciation over time.

Inspection: An inspection is a thorough examination of a property's condition, typically conducted by a licensed inspector. The inspection covers structural components, systems (electrical, plumbing, HVAC), and other aspects like roofing and foundation. Buyers use inspection reports to identify any needed repairs or negotiate the sale price based on the property's condition.

Inspection Contingency: An inspection contingency is a clause in a real estate contract that allows the buyer to have the property inspected before finalizing the purchase. If significant issues are discovered during the inspection, the buyer can negotiate repairs, request a price reduction, or cancel the contract without penalty. This contingency protects the buyer from unforeseen problems.

Interest Rate: The interest rate is the proportion of a loan charged as interest to the borrower, expressed as an annual percentage. It determines the cost of borrowing money and is influenced by factors such as the borrower's credit score, loan type, and market conditions. Lower interest rates reduce borrowing costs, making it more affordable to finance real estate purchases.

Interest-Only Loan: An interest-only loan is a type of mortgage where the borrower pays only the interest for a specified period, usually 5-10 years. After the interest-only period, the loan converts to a standard amortizing loan with higher monthly payments. Interest-only loans can lower initial payments but carry the risk of larger payments later.

Investment Property: An investment property is real estate purchased with the intention of earning a return on investment, either through rental income, property appreciation, or both. Investment properties can include residential homes, commercial buildings, and land. Investors analyze potential returns, market trends, and property management considerations before purchasing.

Joint Venture: A joint venture is a business arrangement where two or more parties agree to pool their resources to accomplish a specific task, such as a real estate investment. Each party contributes capital, expertise, or other assets and shares in the profits and losses. Joint ventures allow investors to leverage each other's strengths and mitigate risks.

Lease Agreement: A lease agreement is a legally binding contract between a landlord and tenant outlining the terms of the rental arrangement. It includes details such as the duration of the lease, rent amount, payment schedule, security deposit, and responsibilities for maintenance and repairs. Both parties must adhere to the lease terms for its duration.

Lease Option: A lease option is an agreement where a tenant has the option to purchase the property at a predetermined price after renting it for a specified period. This arrangement benefits tenants who want to buy but need time to secure financing or improve their credit. It also provides landlords with rental income and the potential for a future sale.

Leasehold Estate: A leasehold estate is an interest in real property that grants the holder the right to use and occupy the property for a specified period, as defined in a lease agreement. Leasehold estates are typically used for commercial properties, where tenants may lease land or buildings for long-term use while paying rent to the property owner.

Leverage: Leverage in real estate refers to using borrowed capital to increase the potential return on investment. By financing a property purchase with a mortgage, investors can control more property with less of their own money. This strategy amplifies gains if the property appreciates but also increases risk if property values decline.

Lien: A lien is a legal claim or right against a property, usually to secure payment of a debt or obligation. Common types of liens include mortgages, tax liens, and mechanic's liens. Liens must be satisfied before the property can be sold, and they can complicate transactions if not properly addressed.

Lien Waiver: A lien waiver is a document signed by a contractor, subcontractor, or supplier waiving their right to file a lien against the property for work performed or materials supplied. Lien waivers are often used during construction projects to ensure that payments are made and to protect property owners from future claims.

Loan-to-Value Ratio (LTV): The loan-to-value ratio (LTV) is a measure of the loan amount compared to the appraised value of the property. It is calculated by dividing the mortgage amount by the property's value and expressed as a percentage. LTV is a key factor in determining mortgage terms, with lower LTV ratios generally resulting in better loan conditions.

Market Value: Market value is the estimated amount a property would sell for on the open market, considering current market conditions, demand, and comparable property sales. It reflects what a willing buyer would pay and a willing seller would accept in an arms-length transaction. Market value is essential for pricing properties, securing financing, and property taxation.

Mortgage: A mortgage is a loan used to purchase real estate, where the property serves as collateral for the loan. The borrower makes regular payments to the lender, including principal and interest, until the loan is fully repaid. Mortgages allow individuals to buy homes without paying the full purchase price upfront.

Multi-Family Property: A multi-family property is a residential building designed to house multiple separate families, such as duplexes, triplexes, or apartment complexes. These properties provide multiple rental units, offering investors the potential for higher rental income and diversification of risk compared to single-family homes.

Net Lease: A net lease is a type of lease agreement where the tenant pays not only rent but also some or all of the property expenses, such as taxes, insurance, and maintenance. There are different types of net leases, including single net, double net, and triple net leases, each specifying the expenses the tenant is responsible for.

Net Operating Income (NOI): Net Operating Income (NOI) is a measure of a property's profitability, calculated by subtracting operating expenses from gross income. It does not include mortgage payments, capital expenditures, or income taxes. NOI is used to evaluate the performance of an income-producing property and to determine its value.

Net Worth: Net worth is the total value of an individual's or entity's assets minus their liabilities. In real estate, net worth can include the value of owned properties, minus any outstanding mortgages or debts. Understanding net worth helps investors assess their financial health and borrowing capacity.

Offer: An offer is a proposal by a buyer to purchase a property at a specified price and under certain conditions. The offer is typically submitted in writing and may include contingencies such as financing or inspections. The seller can accept, reject, or counter the offer, initiating negotiations.

Operating Expenses: Operating expenses are the costs associated with running and maintaining an income-producing property. These include property management fees, repairs and maintenance, utilities, property taxes, insurance, and marketing expenses. Operating expenses are subtracted from gross rental income to calculate the net operating income (NOI).

Option Contract: An option contract gives the buyer the right, but not the obligation, to purchase a property at a predetermined price within a specified timeframe. The buyer pays an option fee for this right, which is typically non-refundable. Option contracts provide flexibility and can be used for various investment strategies.

Owner Financing: Owner financing, also known as seller financing, occurs when the property seller provides financing to the buyer instead of a traditional mortgage lender. The buyer makes payments directly to the seller based on agreed-upon terms. This arrangement can benefit buyers who have difficulty securing conventional financing and sellers looking to attract more buyers.

Pre-Approval: Pre-approval is a preliminary evaluation by a lender to determine the loan amount a potential borrower qualifies for based on their financial situation. It involves a credit check, income verification, and assessment of debt-to-income ratio. Pre-approval strengthens a buyer's position in negotiations and demonstrates their ability to secure financing.

Principal: Principal is the original sum of money borrowed in a loan, excluding interest. As borrowers make payments, a portion goes toward reducing the principal balance, while the rest covers interest. Reducing the principal decreases the amount of interest owed over the life of the loan.

Principal Reduction: Principal reduction refers to the process of paying down the principal balance of a loan, thereby reducing the amount owed. Regular mortgage payments typically include both principal and interest components. Making additional payments toward the principal can shorten the loan term and reduce the total interest paid over time.

Private Mortgage Insurance (PMI): Private mortgage insurance (PMI) is a type of insurance required by lenders for borrowers who make a down payment of less than 20% of the home's purchase price. PMI protects the lender in case the borrower defaults on the loan. Borrowers can request to cancel PMI once they have sufficient equity in the home.

Pro Forma: A pro forma is a financial statement that projects the future income, expenses, and profitability of an investment property. It includes estimates of rental income, operating expenses, and potential appreciation. Pro forma statements help investors evaluate the viability of a property and make informed decisions based on projected financial performance.

Property Management: Property management involves overseeing the daily operations of a real estate property, including maintenance, tenant relations, rent collection, and financial reporting. Property managers act on behalf of property owners to ensure the property is well-maintained and profitable. They play a crucial role in maximizing the return on investment for rental properties.

Property Tax: Property tax is a tax levied by local governments on real estate based on its assessed value. The revenue generated from property taxes is used to fund public services such as schools, infrastructure, and emergency services. Property owners are responsible for paying property taxes annually or semi-annually, depending on local regulations.

Real Estate Investment Trust (REIT): A Real Estate Investment Trust (REIT) is a company that owns, operates, or finances income-producing real estate. REITs pool funds from multiple investors to purchase and manage a diversified portfolio of properties. Investors can buy shares in publicly traded REITs, providing them with exposure to real estate markets without directly owning property.

Real Estate Owned (REO): Real Estate Owned (REO) refers to properties that lenders have taken back through foreclosure and now own. These properties are typically sold "as-is" and can be purchased at a discount. Investors often seek REO properties as opportunities to buy below market value and renovate for resale or rental.

Refinance: Refinancing involves replacing an existing mortgage with a new one, typically to secure better terms such as a lower interest rate or reduced monthly payments. Homeowners refinance to save money, access home equity, or change the loan term. The process includes applying for a new loan, undergoing credit checks, and closing on the new mortgage.

Rent Control: Rent control refers to government regulations that limit the amount landlords can charge for rent and restrict the frequency and magnitude of rent increases. Rent control policies aim to protect tenants from excessive rent hikes and ensure affordable housing. However, these regulations can also impact landlords' ability to generate rental income and maintain properties.

Rent Roll: A rent roll is a document that lists all the rental units in a property, along with tenant information, lease terms, and rental income. It provides property owners and managers with an overview of the property's financial performance and occupancy status. Rent rolls are essential for tracking income and managing tenant relationships.

Rent-to-Own: Rent-to-own is a rental agreement that includes an option for the tenant to purchase the property at a specified price within a certain period. A portion of the rent paid during the lease term may be credited toward the purchase price. Rent-to-own arrangements provide tenants with the opportunity to build equity while renting and can help those who need time to secure financing.

Replacement Cost: Replacement cost is the estimated cost to rebuild or replace a property or structure with similar materials and construction methods. It is used in insurance policies to determine the amount of coverage needed to restore a property to its original condition after damage. Replacement cost does not account for the land value or market conditions.

ROI (Return on Investment): Return on Investment (ROI) measures the profitability of an investment, calculated as a percentage of the original investment cost. In real estate, ROI considers rental income, property appreciation, and expenses. A higher ROI indicates a more profitable investment, helping investors compare different opportunities.

Sales Comparison Approach: The sales comparison approach is a method of valuing property by comparing it to similar properties that have recently sold in the same area. This approach considers factors such as location, size, condition, and features. It is commonly used for residential real estate appraisals to determine fair market value.

Section 8: Section 8 is a federal program that provides rental assistance to low-income families, the elderly, and disabled individuals. Administered by the U.S. Department of Housing and Urban Development (HUD), it subsidizes a portion of the tenant's rent, making housing more affordable. Landlords participating in the program receive guaranteed rental income from the government.

Securitization: Securitization is the process of pooling various types of debt, such as mortgages, and selling them as securities to investors. These mortgage-backed securities (MBS) provide investors with regular income from the underlying loans' payments. Securitization helps lenders free up capital to issue more loans and spreads risk among a broader investor base.

Short Sale: A short sale occurs when a property is sold for less than the amount owed on the mortgage, with the lender's approval. This option is typically pursued when the homeowner is facing financial hardship and cannot keep up with mortgage payments. Short sales help homeowners avoid foreclosure and mitigate the lender's losses.

Short-Term Rental: A short-term rental is a property rented for a short duration, typically less than 30 days. Examples include vacation rentals and Airbnb properties. Short-term rentals can generate higher rental income compared to long-term leases but require more frequent management and maintenance. Local regulations and zoning laws often govern short-term rental operations.

Subject-To: The subject-to method involves purchasing a property while keeping the existing mortgage in place. The buyer takes over the mortgage payments without formally assuming the loan. This strategy allows buyers to acquire properties with minimal upfront costs and can be advantageous in situations where securing new financing is challenging.

Tax Lien: A tax lien is a legal claim placed on a property by the government due to unpaid taxes. It grants the government a right to collect the owed taxes from the property owner. Tax liens must be settled before the property can be sold, and they can lead to foreclosure if not paid.

Title: A title is a legal document that establishes ownership of a property. It includes information about the property's history, including previous owners and any liens or encumbrances. Clear title is essential for a smooth real estate transaction, ensuring that the buyer receives full ownership rights without legal disputes.

Title Insurance: Title insurance is a policy that protects property buyers and lenders from financial loss due to defects in the property's title. It covers issues such as undisclosed liens, errors in public records, and fraudulent claims. Title insurance provides peace of mind by ensuring that the buyer receives a clear and marketable title.

Triple Net Lease (NNN): A triple net lease (NNN) is a lease agreement where the tenant is responsible for paying the property's operating expenses, including property taxes, insurance, and maintenance, in addition to rent. This arrangement shifts the financial burden of these costs from the landlord to the tenant. Triple net leases are common in commercial real estate.

Turnkey Property: A turnkey property is a fully renovated home or apartment building that is ready for immediate occupancy or rental. These properties often come with tenants in place and property management services, making them attractive to investors seeking a hassle-free investment. Turnkey properties allow investors to generate rental income from day one without the need for extensive renovations.

Underwater Mortgage: An underwater mortgage occurs when the outstanding loan balance exceeds the property's current market value. This situation often arises due to declining property values or economic downturns. Homeowners with underwater mortgages may struggle to sell or refinance their properties without incurring significant financial losses.

Underwriting: Underwriting is the process by which a lender assesses the risk of providing a loan to a borrower. It involves evaluating the borrower's credit history, income, debt-to-income ratio, and the property's value. Successful underwriting results in loan approval, while high-risk applications may be denied or require additional conditions.

Vacancy Allowance: Vacancy allowance is a budgeting estimate used by property owners to account for potential periods when rental units are unoccupied. It represents a percentage of the gross rental income set aside to cover lost income during vacancies. Planning for vacancy allowance helps property owners manage cash flow and maintain financial stability.

Vacancy Rate: The vacancy rate is the percentage of available rental units in a property that are currently occupied. It is a critical metric for property managers and investors to assess the property's performance and income potential. High vacancy rates indicate strong demand and effective management, while low rates may signal issues with the property or market conditions.

Walkthrough: A walkthrough is a final inspection of a property conducted by the buyer before closing the transaction. The purpose is to ensure that the property is in the agreed-upon condition and that any required repairs have been completed. A successful walkthrough allows the buyer to proceed with confidence, while any issues identified can be addressed before closing.

Warranty Deed: A warranty deed is a legal document in which the seller guarantees that they hold clear title to a property and have the right to sell it. The deed also ensures that there are no undisclosed encumbrances or claims against the property. Warranty deeds provide the highest level of protection for buyers in real estate transactions.

Yield: Yield is a measure of the return on an investment, expressed as a percentage of the investment's cost or current market value. In real estate, yield can refer to the rental income generated by a property relative to its purchase price or current value. Higher yields indicate more profitable investments.

Zoning: Zoning is the process of dividing land in a municipality into zones, each of which has specific regulations regarding land use. Zoning laws determine what types of buildings and activities are permitted in each area, such as residential, commercial, or industrial. These regulations help manage urban development and ensure land is used efficiently and appropriately.

Zoning Variance: A zoning variance is an exception to the local zoning regulations granted by a municipal authority. Property owners may seek a variance to use their property in a way that is not typically allowed under current zoning laws. Variances are granted based on specific criteria and circumstances, such as demonstrating that the strict application of zoning rules would cause undue hardship.