Real estate investing glossary

71 terms · the definitions DealValuator scores with

Every term on a DealValuator worksheet, in plain English. These are the same definitions the analysis uses, so a number on your report means exactly what the entry below says. Investors, agents, brokers, and lenders share this vocabulary; a lender who asks about your DSCR means the one defined here.

Valuation & offer

ARV (After-Repair Value): After-Repair Value, what the home is worth once it's fixed up, based on nearby renovated sales.
Asking / As-Is Price: The current list / as-is price, what it's listed at (or would list for) today, before any discount.
Max Offer (70% Rule): The 70% Rule, the most a flipper should pay: 70% of ARV minus the rehab cost. A quick "don't pay more than this" ceiling.
Max Offer (BRRRR): Most to pay for a BRRRR so a 75% cash-out refi returns your money: 75% of ARV minus rehab.
Estimated Value: An automated value estimate (like a Zestimate), a starting point, not an appraisal.
Contingency: A buffer added to the rehab budget (typically 10-15%) for the surprises every renovation has.
Holding Costs: What it costs to own the property while you work on it, taxes, insurance, utilities, lawn, HOA.

Financing

Points: Origination / discount points. A lender fee at closing, as a % of the loan. One point = 1% of the loan amount.
Loan-to-Cost (LTC): Loan-to-Cost. The loan as a % of what the project costs (purchase + rehab). Hard-money lenders usually cap here.
Loan-to-Value (LTV): Loan-to-Value. The loan as a % of what the property is worth (ARV for rehab loans).
Cash Required: Total cash out of your own pocket across the whole project, the denominator for cash-on-cash returns.
Equity: What the property is worth minus what you owe on it.
Refi LTV: Refinance Loan-to-Value, how much of the ARV the bank lends on a cash-out refi (typically ~75%).
DSCR / DCR: Debt-Service Coverage Ratio, net income ÷ loan payment. Above 1.0 the rent covers the mortgage; lenders like 1.2+.

Rental returns

NOI (Net Operating Income): Net Operating Income, rent collected minus operating expenses (taxes, insurance, management, repairs), before the mortgage.
EGI (Effective Gross Income): Effective Gross Income, the rent you actually collect after a vacancy allowance.
Cap Rate: Cap Rate, yearly net operating income ÷ price. The cash return if you paid all cash. DFW rentals often run ~5 to 7%.
Cash-on-Cash: Cash-on-Cash, yearly cash flow ÷ the actual cash you put in (down payment + closing + rehab). Your real return on cash invested.
Monthly Cash Flow: Cash left each month after the mortgage and all expenses. This is the money in your pocket.
Cash Invested: Total cash out of pocket to buy, down payment + closing costs + rehab.
GRM (Gross Rent Multiplier): Gross Rent Multiplier, price ÷ yearly rent. A rough "how many years of rent equals the price", lower is cheaper.
Rent-to-Price (1% Rule): Rent-to-Price, monthly rent as a % of price. The "1% rule" says aim for ~1%+.
Breakeven Occupancy: Breakeven Occupancy, how full the property must stay to cover all costs + the mortgage. Lower is safer.
Payback Period: How many years of cash flow it takes to return the cash you invested. Negative means it never does at these numbers.

Flip & brrrr

All-In Cost: All-In Cost, everything you put in: purchase + rehab + closing + carrying costs.
Flip Profit: Flip profit, ARV minus all-in cost minus selling costs (agent commission, etc.).
Flip Margin: Flip profit as a % of ARV. Pros usually want 10%+ to cover surprises.
ROI: Return on Investment, profit ÷ the dollars you put in, as a %.
Annualized ROI: ROI scaled to a full year (a 6-month flip's ROI × 2), so you can compare to a rental's yearly return.
Cash Left In (BRRRR): BRRRR, cash still tied up after you cash-out refinance. $0 = you pulled all your money back out (an "infinite" return).
Post-Refi Cash-on-Cash: BRRRR cash-on-cash after the refinance, yearly cash flow ÷ the cash you left in.

Wholesale

Assignment Spread: Wholesale, the room between your contract price and what an end-buyer would pay (70% rule). That gap is your assignment fee + their margin.
Max to End Buyer: The most a flipper/BRRRR buyer would pay for it (70% of ARV minus rehab), the ceiling you assign under.

Long-term hold & exit

IRR (Internal Rate of Return): Internal Rate of Return, the annual % return over the whole hold, counting cash flow + the sale, and the timing of each.
Equity Multiple: Total dollars returned ÷ dollars invested (2.0x = you doubled your money over the hold).
Net Sale Proceeds: Cash left at sale after selling costs and paying off the remaining loan balance.
Exit Cap Rate: The cap rate you assume a future buyer pays, used to estimate the sale price at exit. Higher = more conservative.
Appreciation: How much you assume the value grows per year.
Depreciation: A yearly paper tax deduction on the building (over 27.5 years) that shelters rental income, no cash leaves your pocket.

Short-term rentals

ADR (Average Daily Rate): Average Daily Rate, the nightly price for a short-term rental.
Occupancy: The % of nights a short-term rental is booked.

Strategies

Fix & Flip: Fix & Flip, buy, renovate, and resell for a profit in months.
Buy & Hold: Buy & Hold, a long-term rental you keep for cash flow + appreciation.
BRRRR: BRRRR, Buy, Rehab, Rent, Refinance, Repeat: force value, then cash-out refi to pull your money back out.
Wholesale: Wholesale, put it under contract and assign the contract to another buyer for a fee (you don't buy it).
Short-Term Rental: Short-Term Rental, nightly (Airbnb-style) instead of a long lease.
Build-to-Rent: Build-to-Rent, ground-up construction kept as a rental. Scored on the development spread: yield on cost (NOI ÷ all-in) vs the market cap rate; then a refi returns capital.
New Build: New Build, ground-up construction; profit = completed value minus all-in build cost.
Land: Land, raw or lot purchase to hold or resell.
Yield on Cost: Stabilized NOI ÷ all-in cost, what the asset yields on what it cost to create. The development metric.
Development Spread: Yield on cost minus the market cap rate, in basis points, the margin earned for taking construction risk instead of buying stabilized.
Value Created: Completed value minus all-in cost, the equity the build itself created.
Wholetail: Buy at a discount, skip the renovation, resell fast at a lighter discount. The exit for houses too good to wholesale and too clean to gut.
DSCR Loan: A rental loan underwritten on the property’s income instead of your personal income. The lender sizes and prices it off the DSCR.

Reading the verdict

Buy-Box: Your written go / no-go criteria. Minimum cap rate, DSCR, flip margin, and the rest. The engine scores every deal; the box decides which ones deserve your money.
Exit Ranking: Every exit run through the same math and ranked by return quality, feasibility, and stability under stress. A money-losing exit can never outrank a working one.
Risk Rating: Low / medium / high, from how far the exit’s score sits above failing and how hard it moves when the inputs are stressed ±10%.
Stress Test (Sensitivity): Each input moved ±10% one at a time and the deal re-scored. If a small move flips the verdict, that input is the one to verify before you offer.
Deal Killers: The specific reasons an exit fails at these numbers, negative spread, DSCR under 1.0, a thin flip margin, listed so you know what to renegotiate.
AI Draft: A number or paragraph the software proposed rather than computed. Always shown dotted, always yours to accept, edit, or discard. The engine’s math is never a draft.
Lump-Sum Budget: One ballpark figure standing in for the whole renovation. Good enough to analyze a deal, never good enough to sign a contract on.

Running the project

Quantity Takeoff: Working out how much material a job needs from its measurements. Concrete by the yard, paint by the gallon, flooring by the box, before pricing it.
Change Order: A written record of a scope change and its cost. Approved change orders raise the working budget; the original underwriting never quietly moves.
Baseline: A frozen snapshot of the inputs and budget at the moment you committed. The underwriting of record that actuals get measured against.
Working Budget: The base budget plus approved change orders. What the project is currently allowed to cost.
Draw: A scheduled release of loan funds as work completes. Lenders inspect, then fund. Nobody advances the whole rehab on day one.
Percent Complete: How far along a task actually is, recorded from the site. It feeds the schedule’s work-complete number, which is only as honest as the last site visit.
Earned Value: Comparing work complete against budget spent. When spend runs well ahead of the work, the overrun has already started, the invoices just haven’t caught up.
Final Wrap: The post-mortem report: what you underwrote next to what actually happened, line by line, ending in realized profit. The point is a smarter next offer.

Raising money

Capital Stack: Who funded the deal and on what terms. The waterfall pays capital back first, then the preferred return, then splits what remains.
Preferred Return: The annual return an investor accrues on their capital before any profit is split. “8% pref” means their first 8% a year comes off the top.

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