Forty terms, each with a straight definition, a worked numeric example, and what actually moves the number — written by Alberto Molina, numbers checked by Kyle Sowell.
The numbers every deal turns on — value, offers, returns, and the costs in between.
What a property will be worth after full renovation, proven by comparable sales.
Maximum allowable offer — the most you can pay and still leave room for costs and profit.
The screening rule: pay no more than 70% of ARV minus repairs.
Net operating income divided by price — a property's unleveraged yield.
Annual cash flow divided by the actual cash you put in.
Net operating income — what a property earns after operating expenses, before debt.
Price divided by gross annual rent — the fastest, crudest rental screen.
Monthly rent should reach about 1% of the all-in price for a rental to deserve analysis.
Assume operating expenses eat about half of gross rent — before the mortgage.
Principal, interest, taxes, and insurance — the four parts of a full mortgage payment.
A comparable sale — a similar property that sold, used to prove what yours is worth.
The three scopes of renovation — cosmetic, mid-grade, and full gut — used to price repairs fast.
Everything a property costs you per month while you own it and it isn't sold or rented yet.
The fees of the transaction itself — title, escrow, lender, recording — paid at both ends of a deal.
How deals get financed: lenders, points, and the ratios lenders use.
Short-term, asset-based loans from private lenders — fast, expensive, built for flips.
Prepaid loan cost: one point equals one percent of the loan amount.
Loans from individuals — not banks, not hard-money companies — negotiated deal by deal.
Debt service coverage ratio — NOI divided by the mortgage payment; the lender's cash-flow test.
The plays themselves — assignments, BRRRR, creative structures, and exits.
Transferring your contract position — your right to buy — to another buyer before closing.
The wholesaler's pay — the spread between the contract price and what the end buyer pays.
Two closings instead of an assignment: you buy the property, then immediately resell it.
The strategy of contracting a property below market and assigning the contract to an investor-buyer.
Buy, Rehab, Rent, Refinance, Repeat — recycling the same capital through rental after rental.
Your planned way out of a deal — wholesale, flip, hold, refinance — decided before you buy.
Buying a property while the seller's existing mortgage stays in place — you take the deed, not the loan.
The seller acts as the lender: you pay a down payment and monthly payments on a note the seller carries.
Replacing a contract or party with a new agreement — in real estate, swapping in a new buyer with the seller's consent.
The paperwork and court processes underneath the deals.
The deposit a buyer puts up to show the contract is real — and what's at risk if they default.
Foreclosure through the courts — the lender sues, a judge orders the sale.
Foreclosure outside the courts, under the deed of trust's power of sale — faster, statute-driven.
The window after a tax or foreclosure sale when the former owner can reclaim the property by paying what's owed.
What a buyer receives at a tax sale in a tax-deed state: the property itself, sold for unpaid taxes.
A claim against a property for unpaid taxes — in lien states, the lien itself is what investors buy.
The court process that settles a deceased person's estate — and why inherited houses reach investors.
The voucher program's vocabulary — standards, contracts, and inspections.
What a property should rent for, established from comparable rentals — not from hope or the seller's say-so.
Fair Market Rent — HUD's published rent benchmark for an area, by bedroom count.
Small Area FMR — HUD's zip-code-level rent benchmarks inside metro areas.
The housing authority's maximum subsidy level for a unit size — the effective rent ceiling in the voucher program.
The Housing Assistance Payments contract — the agreement between the landlord and the housing authority that pays the subsidy.
HUD's inspection standard for assisted housing — the health-and-safety checklist a voucher unit must pass.