Real Estate Investing Glossary
ARV (After Repair Value)
The estimated value of a property after all repairs and renovations are completed.
BRRRR
Buy, Rehab, Rent, Refinance, Repeat - a strategy for building a real estate portfolio with minimal capital.
Cap Rate
Capitalization Rate - the ratio of net operating income to property value, expressed as a percentage.
Cash-on-Cash Return
The annual return on the actual cash invested in a property, calculated as annual cash flow divided by total cash invested.
Cash Flow
The net income generated by a property after all expenses and debt service are paid.
LTV (Loan-to-Value)
The ratio of the loan amount to the appraised value of the property, expressed as a percentage.
NOI (Net Operating Income)
The annual income generated by a property after operating expenses but before debt service and taxes.
1% Rule
A quick screening rule stating that monthly rent should be at least 1% of the purchase price for a property to cash flow well.