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These flashcards cover key concepts and terminology related to commercial real estate, as reviewed in the lecture notes.
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Net Operating Income (NOI)
Income - Expenses in real estate.
Cap Rate
The ratio used to estimate the return on an investment property.
Leverage
Using borrowed money to amplify investment power.
PITI
Principal, Interest, Taxes, and Insurance in a mortgage context.
Value-Add
Increasing the value of a property by improving its income-producing potential.
Debt Service Coverage Ratio (DSCR)
A measure of cash flow available to pay current debt obligations.
Loan-to-Value (LTV)
A financial term used by lenders to express the ratio of a loan to the value of an asset.
Due Diligence
The process of verifying the details of a property before purchase.
Easement
A legal right to use someone else's land for a specific purpose.
Proforma
A financial projection that estimates future income and expenses.
Inspection Objection
A document submitted to request repairs from the seller before closing.
Appraisal
An expert estimate of the value of a property.
Accessory Dwelling Unit (ADU)
A separate living space on a property that can provide rental income.
House Hacking
A strategy where homeowners rent out part of their home to cover housing costs.
Risk-Return Relationship
The principle that potential return rises with an increase in risk.