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Industry Terms


  • Acreage
    A 2-dimensional measure of land equaling 160 square rods, 10 square chains, 4,840 square yards, or 43,560 square feet.
  • Acquisition Loan
    Financing for the purchase, or acquisition, of property. The targeted property may be intended for resale by a wholesaler, for a fix and flip project, or for a condominium conversion, but as long as the loan is earmarked for the purchase only, it is considered to be an acquisition loan.
  • After Repair Value (ARV)
    The value of the home after all the repairs have been completed. This is the “Sell” part of the Buy-Fix-Sell project. It is important to calculate the anticipated ARV before purchasing an investment property because often times the amount put in towards the repairs and renovations does not translate to the overall value of the property. Also, hard money lenders tend to use the ARV to help determine the maximum loan amount.
  • Appraisal
    Statement of value as of a certain date. It is prepared by a licensed and/or credentialed expert who has complied with the training requirements of the state and/or one of several recognized appraisal institutes.
  • Amenities
    In appraisal, the non–monetary benefits derived from property ownership.
  • Anchored
    A piece of commercial real estate property, which will serve as the main tenant in a shopping center.
  • Anchors
    All long term, credit worthy tenants.
  • As-Is-Value (AIV)
    The stated (from the borrower) and/or appraised value (from an appraiser) for a property.
  • Assignee
    One to whom a transfer of an interest is done; this party then has the right to purchase the existing contract.
  • Assignment
    Written document by which an interest, other than real property, is transferred from one entity/person to another.
  • Assignor
    A party who is in control of an assignment and can transfer said assignment to an assignee.
  • Assisted Living
    Type of senior housing that is typified by independent living and limited assistance to its renters.
  • Assumability
    A mortgage loan which can be transferred to another person without a change in the terms of the loan.
  • Available SF
    The square feet available for lease.
  • Average Annual Occupancy
    Percentage of currently rented units in a building, city, neighborhood or complex.


  • Basis Point (BP)
    1/100th of 1; expressed as a margin over an index rate.
  • Borrowing Entity Type
    The legal form under which property is owned.
  • Bridge-Loan
    A bridge loan is a short-term loan used until permanent financing is secured or an existing obligation is removed (property sold and lien satisfied). This type of financing allows the user to meet current obligations by providing immediate cash flow.
  • Building Permit
    A document, issued by government regulatory authority that allows a builder to construct or modify a structure.
  • Building Square Footage (SF)
    The usable square footage of the building.


  • Capital Expenditures
    Line items on a profit and loss statement that would not be expensed on an annual basis. This category would include replacement of major building systems, such as roofs, etc.
  • Capitalization Rate
    The ratio of the first year NOI to the asking price (NOI/asking price). Not the rate of return.
  • Carve Out
    The definition used for the inclusion of recourse in loan documents for fraud.
  • Cash Out Refinance
    When a borrower utilizes equity in one project for business purposes (specific for Fix & Flip funding).
  • Clearance
    The distance between the building’s floor and effective storage ceiling.
  • Clear Title
    Title that is not encumbered or burdened with defects.
  • Closing Costs
    The costs and fees associated with the official change in ownership of the property and with obtaining the mortgage, that is assessed at the closing.
  • Clouded Title
    Any claim, encumbrance or defect that contradicts the title record as understood by the property owner or interested party.
  • Commercial Land
    Development and transitional land acquired for investment use: land for lots, site selection and assemblage of parcels.
  • Commercial Mortgage Back Security (CMBS)
    A bond or other financial obligation secured by a pool of mortgage loans.
  • Commercial Use
    Property that is only used as a business (having no residential component).
  • Comparative Market Analysis
    An estimate of the value of a property based on an analysis of sales of properties with similar characteristics.
  • Comps
    Comparable sales of homes located in the same area with similar size, condition, and features that sold within a recent timeframe as the home you are looking to sell or buy. Comps are used to help determine the After Repair Value (ARV) and if the acquisition cost makes sense.
  • Conduit
    The financial intermediary that sponsors the conduit between the lender(s) originating loans and the ultimate investor. The conduit makes or purchases loans from third party correspondents under standardized terms, underwriting and documents and then, when sufficient volume has been obtained, pools the loans for sale to investors in the CMBS market.
  • Congregate Care
    A type of senior housing that typified by a central eating facility, smaller rooms, and a higher level of care for its tenants.
  • Constant Maturity Treasure (CMT)
    An index based on the U.S. treasury that is used in the pricing of debt for banks.
  • Construction Draws
    While acquisition funds are disbursed on day one, reserve funds are held until needed and paid out in construction draws. When money is needed for construction costs, you’ll make a draw request to be reimbursed for work completed and/or materials on site. A third-party inspector is employed to assess a project and provide us with a comprehensive report outlining the percentage complete for each line item in a borrower’s budget.
  • Construction Loan
    Is frequently used to finance residential or commercial new construction projects. These loans typically provide periodic disbursements to the builder as each stage of the building is completed. Typical construction loans run for six months to two years, requires interest-only payments (that may sometimes be bundled into the loan itself), and are funded in installments that follow a predetermined schedule of milestones.
  • Construction Type
    The type of construction used for a commercial building, (i.e., concrete tilt–up, etc.).
  • Contingency
    An element of an agreement that must be satisfied before the total agreement can be consummated.
  • Contingent
    Dependent upon an uncertain future event or condition.
  • Corporation
    An entity in which individual owners are not directly responsible for any debt incurred by the company. In corporations, independent stockholders’ own parts of the company, but are not directly related to the actions of the company.
  • Cost of Funds Index (COFI)
    Index used to determine interest rate changes for adjustable-rate mortgages. it is based on the cost of funds of the 11th district of the federal home loan bank.
  • Coupon
    The coupon on U.S. government securities expressed as an annual percentage of face value, is the interest rate the U.S. government promises to pay to the holder on an ongoing basis until maturity.
  • Credit Tenant
    A tenant, who has obtained a debt rating by SANDP or Moody’s of "BBB–" or better.
  • Credit Tenant Net Lease
    A lease with a tenant that has a credit rating of BBB– or better.
  • Cross Collateralize
    A lending technique when an asset or assets are used as collateral for a loan on a different property.
  • Crowdfunding
    A group of investors, who don’t necessarily know each other, buy a percentage interest in an asset and/or loan through a single portal.


  • Debt Service
    The periodic payments of a borrower’s obligations.
  • Debt Service Coverage Ratio (or Debt Coverage Ratio)
    Measures a mortgaged property’s ability to cover monthly payments defined as the ratio of net operating income over the periodic payments (principal and interest) made on a loan.
  • Deed
    A written document that transfers ownership of land from one party to another. The seller is called the “Grantor” and the buyer is called the “Grantee.” Deeds may be of many kinds. Depending upon the language of the deed, the legal capacity of the grantor, and other circumstances.
  • Deed of Trust
    A security instrument conveying the legal title to real property as security for the repayment of a loan.
  • Default
    Failure to abide by the terms of a loan.
  • Defeasance
    A clause in a mortgage that gives the borrower the right to prepay a commercial mortgage by purchasing us treasuries in an escrow account to pay off ongoing debt service.
  • Density
    The number of buildings or persons occupying a certain area of land, generally an acre.
  • Depreciation (Accounting)
    Allocating the cost of an asset over its estimated useful life.
  • Depreciation (Appraisal)
    A charge against the reproduction cost (new) of an asset for the estimated wear and obsolescence. depreciation may be physical, functional or environmental.
  • Discount Rate
    The rate of interest that the federal reserve charges member banks for loans.
  • Distressed Properties
    Properties that are in poor condition or under siege financially (which may include foreclosure); they usually represent great opportunities for fix and flip investments.
  • Dock High
    Existence and/or a number of dock level doors.
  • Double Wide
    A mobile home consisting of two units that have been fastened together along their length.
  • Draw Schedule
    A borrower’s schedule for completing portions of the project to secure reimbursement from the lender (not to exceed the approved-amount of the loan).
  • Due Diligence
    The legal definition: a measure of prudence, activity or assiduity, as is properly to be expected from, and ordinarily exercised by, a reasonable and prudent person under the particular circumstances. In CMBS due diligence is the foundation of the process because of the reliance securities investors must place on the specific expertise of the professionals involved in the transaction.


  • Effective Gross Income
    Gross income of a building if fully rented, less an allowance for estimated vacancies.
  • Engineering Report
    Report generated by an architect or engineer describing the current physical condition of the property and its major building systems, i.e., HVAC, parking lot, roof, etc. The report also determines an amount for calculating replacement reserves, if needed.
  • Entitlements
    A right to benefits specified especially by law or contract.
  • Entity
    Either an LLC, a corporation, a sole proprietorship, or a partnership; not an individual.
  • Environmental Report
    Report generated by qualified environmental firms to determine potential environmental hazards in a building’s region or within the building itself.
  • Environmental Risk
    Risk of loss of collateral value and of lender liability due to the presence of hazardous materials, such as asbestos, PCB’s, radon, or leaking underground storage tanks (lusts) on a property.
  • Escrow
    An impartial third party that acts on behalf of either seller/buyer or borrower/lender in carrying out the principals’ instructions through to an eventual “closing”. Escrow acts as the custodian for the documents and funds involved – and makes disbursements, delivers documents and effects the consequential changes to the title record of the subject property.
  • Equity
    The difference between market value and the amount you owe on a property. Your equity can increase over time if property value increases or your loan balance is paid down.
  • Eurodollar
    U.S. dollar-denominated deposits at commercial banks outside of the united states.
  • Exit Strategy
    How the borrower plans to pay off the loan, as well as turn a profit. Having a clear exit strategy is an important part of developing your overall plan for the project which will help determine the best type of financing for the deal (i.e. refinance, sell, hold).


  • Fair Market Value
    An appraisal term for the price which a property would bring in a competitive market, given a willing seller and willing buyer, each having reasonable knowledge of all pertinent facts, with neither being under any compulsion to buy or sell.
  • Fix and Flip
    Personal property which for some reason, such as the manner of attachment, has become reality. Such property is also referred to as chattel real.
  • Fixtures
    Personal property which for some reason, such as the manner of attachment, has become reality. Such property is also referred to as chattel real.
  • First Trust Deed
    A lien on real property which is superior to any other lien of record.
  • Fit Out
    Tenant improvements within a commercial property.
  • Flex Space
    An industrial property, which has both an office and an industrial component.
  • Floor–To–Area Ratio (FAR)
    The relationship between the total amount of floor space in a multi–story building and the base of that building. FAR’s are dictated by zoning laws, in effect, stipulate the maximum number of stories a building may have.
  • Foreclosure
    The process by which a lender takes back a property on which the mortgagee has defaulted after exceeding the specified timeframe of being past due.
  • Foundation
    The concrete slab beneath the property, which holds the property in place.


  • General Business
    Includes all of business assets and equipment, may include property or land.
  • General Partnership
    In a partnership, a partner whose liability is not limited. all partners in an ordinary partnership are general partners. a limited partnership must have at least one general partner.
  • Good Faith Deposit
    A deposit made by a purchaser of real estate to evidence an honesty.
  • Government Subsidized
    Rents that are partly paid by the government (e.g. section 8 residential subsidies).
  • Grade Level Door
    A door at the ground level at the foundation.
  • Grant Deed
    A deed used extensively in several States to transfer title. There are a number of implied warranties attributed to it, the main ones being that the grantor has the right to convey the property and that the grantor hasn’t encumbered the property any more than already disclosed. The grantee may hold the grantor liable if the title proves to be defective.
  • Ground Level
    Existence and/or a number of ground-level doors.
  • Ground Up Construction
    Building a structure completely from scratch to completion on a piece of land.
  • Guarantor(s)
    (An) Individual(s) legally responsible for a loan. Since most hard money lenders, only lend to LLCs, each borrower is considered a guarantor on the loan.


  • Hard Money
    Private funds used for the purchase of real estate by investors.
  • Hard Money Loan
    A loan typically secured by a hard asset such as residential or commercial real estate. Such loans usually have high interest rates relative to bank loans due to the short duration (i.e. 12-month term). Hard money lenders typically look more to asset value rather than at the credit characteristics of the potential borrower as the primary loan underwriting factor. Hard money lending is very useful to those who are in need of quick financing since these loans can be closed in as little as a few days. Hard money loans have higher interest rates due to their higher risk and quick service.
  • High Rise Condominium
    A commonly used expression referring to a condominium, that is high enough to require an elevator (typically four floors or more).
  • Holdback
    Portion of a construction loan amount that is not released until a certain stage (such as completion of the foundation) is reached. Upon completion, the borrow receives reimbursement from the lender for the completed portion.
  • Holding Costs
    A borrower’s costs attributed to owning an investment property for a period of time. This includes interest payments, property taxes, house maintenance, insurance and utilities.
  • HUD-1
    A form created and distributed by the transaction’s settlement agent at the settlement of a real estate purchase that lists all of the transaction cash flows between property buyer, seller and lender.


  • Index
    An economic indicator, usually a published interest rate.
  • Industrial
    Property used for industrial purposes, such as factories.
  • Industrial for Lease
    Industrial space available.
  • Initial Advance (IA)
    The amount of the loan that is given to the borrower upfront (for loan calculating purposes, it includes the As-is-Value multiplied by the Loan-To-Value percentage). This plus the borrower’s down payment determines the Total Loan Amount (TLA).
  • Interest Rate
    The amount expressed as a percentage that a borrower has agreed to pay a lender as the price of borrowing a sum of money (interest rates and points are preset).
  • Interest Only Payments
    A loan that only requires the borrower to only pay the interest for a certain period of time and not have to pay down principal or make additional payments other than interest.


  • Joint Venture
    An agreement by two or more individuals or entities to engage in a single project or undertaking. joint ventures are used in real estate development as a means of raising capital and spreading risk. For all practical purposes a joint venture is similar to a general partnership. however, once the purpose of the joint venture has been accomplished, the entity ceases to exist.



  • Lease Assignment
    An agreement between the commercial property owner and the lender that assigns lease payments directly to the lender.
  • Lease Type
    Gross, triple net (NNN), net net (NN), hybrid, etc.
  • Leasehold Improvements
    The cost of improvements for a leased property, often paid by the tenant.
  • Leasing Commissions
    An amount earned by a real estate broker or leasing agent for his services.
  • Lessee
    Tenant in a building.
  • LIBOR (London Interbank Offered Rate)
    The rate that the most creditworthy international banks dealing in Eurodollars charge each other for large loans. Rates are quoted in monthly increments out to 1 year.
  • Lien
    A legal claim on an asset filed with the county clerk. A lien is typically filed by a lender as evidence of its claim upon an asset until such time as the associated loan is repaid.
  • Liquidity
    A measure of the speed that an asset can be sold.
  • Limited Liability Company (LLC)
    One of the more common entities for purchasing real estate.
  • Limited Partnership
    One in which there is at least one partner who is passive and limits liability to the amount invested, and at least one partner whose liability extends beyond monetary investment.
  • Limited Service
    A hotel that offers lodging services only.
  • Loan Officer
    Loan officers’ help borrowers work out their loan agreement and recommend the best plan of action for completing the loan.
  • Loan Points (Points)
    An origination fee. One point is equal to one percent of the principal loan amount. If the loan is $100,000 with 2 points, then the borrower will pay $2,000 in origination fees.
  • Loan Processing Fee
    The fee charged by a lender, to prepare all the documents associated with your mortgage.
  • Loan Term
    The duration of the loan; hard money loans are typically short-term loans (12-months). Terms can be flexible and are dependent on the deal and borrower experience.
  • Loan Term Summary (LTS)
    Document that helps avoid any hidden costs. The LTS outlines all of the conditions of the loan including amounts, penalties, and deadlines.
  • Loan to Cost (LTC)
    A metric used in commercial real estate construction used to compare the financing of a project as offered by a loan to the cost of acquiring the property and rehab budget of the project. Knowing the LTC ratio allows lenders to determine the risk of offering a loan.
  • Loan to Value (LTV)
    This is a ratio derived from the formula (Loan Amount) / (Appraisal Value).
  • Lock–Out Period
    A period of time after loan origination during which a borrower cannot prepay the mortgage loan.
  • Lot Size
    Total square footage of property.
  • Low Rise Condominium
    A commonly used expression referring to a condominium that is too low to require an elevator (typically 1-4 floors).


  • Management Fee
    The agreed–upon compensation paid to a property management company for managing a real estate project. the fee is usually based on a percentage of effective gross income.
  • Margin
    The amount that is added to an index rate to determine the total interest rate.
  • Marketing Expenses
    Expenses accrued to market commercial properties.
  • MAT
    Monthly average treasury.
  • Maturity (Loan Term)
    Maturity date refers to the final payment date of a loan or other financial instrument, at which point the principal (and all remaining interest) is due to be paid.
  • Max Contiguous SF
    The amount of available connected square feet.
  • Mobilization Funds
    The money you need to get started on a construction project.
  • Money Market
    The market for short–term debt instruments.
  • Monthly Interest Payment (MIP)
    The dollar amount of monthly interest payments the borrower pays for the life of the loan – also referred to as the carrying costs of the loan (for loan calculating purposes, it includes the Total Loan Amount multiplied by the Interest Rate divided by the loan term in months).
  • Multi-Family Residential
    A building or several buildings within one complex that contains multiple separate housing units for residential inhabitants. For example, an apartment building, condominiums, or duplex houses.
  • Multi–Family Property Class A
    Properties are above average in terms of design, construction and finish; command the highest rental rates; have a superior location, in terms of desirability and/or accessibility; generally, are professionally managed by national or large regional management companies.
  • Multi–Family Property Class B
    Properties frequently do not possess design and finish reflective of current standards and preferences; construction is adequate; command average rental rates; generally, are well maintained by national or regional management companies; unit sizes are usually larger than current standards.
  • Multi–Family Property Class C
    Properties provide functional housing; exhibit some level of deferred maintenance; command below average rental rates; usually located in less desirable areas; generally managed by smaller, local property management companies; tenants provide a less stable income stream to property owners than Class A and B tenants.
  • Multiple Listing Service (MLS)
    A database where real estate for sale is listed for a given area or region. Brokers from this area work together to compile this list.


  • Net Effective Rent
    Rental rate adjusted for lease concessions.
  • Net Operating Income (NOI)
    Total income less operating expenses, adjustments, etc., but before mortgage payments, tenant improvements and leasing commissions.
  • Net–Net Lease (NN)
    Usually requires the tenant to pay for property taxes and insurance in addition to the rent.
  • Notice of Default (NOD)
    To initiate a non–judicial foreclosure proceeding involving a public sale of the real property securing the deed of trust. The trustee under the deed of trust records a notice of default and election to sell ("NOD") the real property collateral in the public records.


  • 100 Private Pay
    Assisted living designation where senior housing residents pay 100% of the rent versus by welfare or government subsidies.
  • Operating Expense
    Periodic expenses necessary to the operation and maintenance of an enterprise (e.g., taxes, salaries, insurance, maintenance). Often used as a basis for rent increases.
  • Origination
    Securing a completed mortgage application from a commercial or residential borrower.
  • Origination Fees
    A fee charged by hard money lenders on entering a loan agreement to cover the origination and processing of the loan.


  • Potential Gross Rent
    Gross income of a building if fully rented.
  • Pre–Leased
    To obtain lease commitments in a building or complex prior to its being available for occupancy.
  • Pre-Approval Letter
    A document that proves a property buyer has enough liquid cash to purchase a house which can be provided by your bank or lender.
  • Prime Rate
    The rate at which banks lend to their most creditworthy customers.
  • Principal
    (DSCR only)
    1. The amount of debt, not including interest, left on a loan.
    2. The face amount of the mortgage.
  • Private Lending
    An individual or group of individuals that lends to real estate investors. They usually lend their own funds.
  • Property Grade
    A stratification of property type that is indicative of the property’s ability to command rental rates.
  • Property Subtype
    A property description that provides additional information to the lender.
  • Property Tax
    Taxes based on the market value of a property. property taxes vary from state to state.
  • Purchase Price
    Buy of Fix and Flip - the amount paid for the investment.



  • Rate Index
    An index used to adjust the interest rate of an adjustable mortgage loan (e.g., the change in U.S. treasury securities (t–bills) with 1–year maturity. The weekly average yield on said securities, adjusted to a constant maturity of 1 year, which is the result of weekly sales, may be obtained weekly from the federal reserve statistical release. This change in interest rates is the "index" for the change in a specific adjustable mortgage loan.
  • Real Estate Broker
    Person or firm that helps their clients buy and sell their real estate for a fee.
  • Real Estate Investor
    Someone who purchases properties with the intention of making a profit, either through holding for rental income or reselling it at a premium to cost.
  • Real Estate Owned (REO)
    A process where ownership of a property was transferred from an original owner to the owner’s lender through the foreclosure process.
  • Recourse
    Personal liability.
  • Refinance
    Replacing an existing loan with a new one; for Fix and Flip, usually for extended completion of a project.
  • Rehab
    In the world of real estate, rehab is simply another word for renovation. You are fixing, or rehabbing, a property to rent or to sell.
  • Rehab Budget Amount (RBA)
    The dollar amount that a borrower devotes toward rehab for a property (needs to be approved by the lender).
  • Rehab-to-Rent
    Renovating a property with the intentions of renting it out. Rental properties are considered long-term investments.
  • Rent Roll (Schedule of Real Estate)
    A list of tenants leasing a property, which details terms of lease, area leased, and the amount of rent being paid.
  • Rentable Square Feet (same as Net Leasable Area)
    In a building or project, floor space that may be rented to tenants. The area upon which rental payments are based. Generally, excludes common areas and space devoted to the heating, cooling, and other equipment of a building.
  • Replacement Reserves
    An amount set aside from net operating income to pay for the eventual wearing out of short–lived assets. Monthly deposits that a lender may require a borrower to reserve in an account, along with principal and interest payments for future capital improvements of major building systems; i.e., HVAC, parking lot, carpets, roof, etc.
  • Reserve Funds
    Funds a lender requires a Borrower to show in order to close.
  • Return on Investment (ROI)
    A measure of the amount of return on an investment relative to the investment’s cost. This is a % derived from the formula: (Net Profit / Cost of Investment) x 100 | for example, if your net profit is $100,000 and your investment costs are $300,000, your ROI would (.33) x 100 = 33%.
  • Reversionary Value (RV)
    The value of the property at the expiration of a certain time period.


  • Sales Broker
    Commercial real estate broker that represents client in the sale or purchase of a property.
  • Secondary Mortgage Market
    The buying and selling of first mortgages or trust deeds by banks, insurance companies, government agencies, and other mortgagees. This enables lenders to keep an adequate supply of money for new loans. the mortgages may be sold at full value ("par") or above, but are usually sold at a discount. Not to be confused with a "second mortgage."
  • Senior Housing
    Multi-residential property specifically designed for care of senior citizens and/or physically disabled persons (includes assisted listing, congregate care, senior apartments and skilled nursing centers).
  • Scope of Work (SOW)
    This is an outline of all the renovations scheduled to be completed before the house is sold, as well as their anticipated costs. The SOW also gives a timetable of when the service provider expects each component of the rehab to be completed.
  • Short Sale
    This occurs when a seller is selling their house for less than they owe on their mortgage. In order for this to happen, the bank or lending company needs to approve of the sale at the lower price. Short sales are a popular way to find investment properties because of their lower purchase costs.
  • Spread
    Number of basis points over a base rate index.
  • Sprinkler
    The existence of fire suppression systems in the building.
  • Stabilized Operating Property
    The income generated on an annual basis from the commercial property is stable, consistent, and reliable.
  • Structural/Engineering Report
    A property condition report that outlines the current structural stability or instability of a property. The report will outline immediate costs needed to repair the property, as well as a maintenance program to maintain the property at its current status.
  • Suburban
    Describes a town or unincorporated developed area in close proximity to a city. suburbs, largely residential, are often dependent on the city for employment and support services; generally characterized by low–density development relative to the city.


  • Tenant
    One who is given possession of real estate for a fixed period or at will.
  • Tenant Improvements (TI)
    The expense to physically improve the property to attract new tenants to new or vacated space which may include new improvements or remodeling. May be paid by the tenant, landlord, or both. typically, tenants are provided with a market rate TI allowance ($/sq. ft.) That the owner will contribute towards improvements. the tenant must pay for amounts above the TI allowance desired by the tenant.
  • Term
    The length of a mortgage.
  • Term Sheet
    A document that outlines the terms and conditions of the hard money loan agreement.
  • Third-Party Costs
    Costs resulting from third party reports, whether it be appraisal reports, environmental reports or structural engineering reports.
  • Title
    Proof of legal ownership of a real estate asset.
  • Title Insurance
    An insurance policy that insures you against errors in the title search – essentially guaranteeing your, and your lender’s financial interest in the property.
  • Total Annual Operating Income
    Total yearly income less operating expenses, adjustments, etc., but before mortgage payments, tenant improvements and leasing commissions.
  • Total Loan Amount (TLA)
    The total dollar amount for a loan (for loan calculating purposes, it includes the sum of the Initial Advance and Rehab Budget Amount).
  • Total Project Cost (TPC)
    The sum of the Purchase Price, Rehab Budget Amount, and fees.
  • Triple–Net Lease (NNN)
    A lease that requires the tenant to pay for property taxes, insurance and maintenance in addition to the rent (also referred to as "net net net lease").
  • Turnaround Time
    The amount of time it takes from when the investment property is purchased to when it is sold.


  • Underwriting
    The assessment of risk and reward for a potential investment. Underwriters determine the credibility of the potential investor and determines if their investment is going to be able to make enough money to be profitable for all parties involved. Hard money underwriters are typically more concerned with the profitability of the deal than the credit history of the borrower.


  • Vacancy Percent
    The percentage of all units or space that is unoccupied or not rented. On a pro–forma income statement, a projected vacancy rate is used to estimate the vacancy allowance, which is deducted from potential gross income to derive effective gross income.
  • Vacancy
    Unoccupied units as a percentage of the total number.


  • Wholesaler
    A wholesaler contracts a property with a seller and finds a buyer for the property to buy it for a higher price. The wholesaler keeps the difference as a profit (maximum is 10%).



  • Yield
    The rate of return on a security, taking into consideration annual interest payments, purchase price, redemption value, and the time remaining until maturity.