The real estate glossary nobody hands you
Nobody sits you down and teaches the vocabulary, and that is the real barrier to entry. Not capital, not credit. Language. Here are thirty terms in plain words. Learn them and you will follow almost any deal conversation, which is the moment people start treating you like an operator instead of an audience.
From The REbuild — see all 456 pages →
The income and value words
Everything the property earns minus what it costs to run, before the loan. The number every valuation and every loan is built on.
Gross potential rent minus vacancy, concessions, and bad debt, plus other income like fees or tenant protection. What you realistically collect.
NOI divided by price. The unlevered yield, and the market’s opinion of risk wearing a percentage sign.
Rent collected as a share of what a full building at market rent would pay. Physical occupancy flatters you; this one tells the truth.
What the property would collect if every unit were full at market rent. The theoretical ceiling you measure everything against.
Revenue per available square foot. The one number that scores a storage facility, because it catches rate and fill at once.
Existing customer rate increase. Raising rent on tenants already in place. Done with care and notice, it is the most powerful lever in storage.
Value you create by raising income or cutting expense instead of waiting on the market. The only appreciation you control.
The debt words
Debt service coverage ratio: NOI divided by annual debt service. The property’s breathing room, and the first test a credit committee runs.
NOI divided by the loan amount. The return the lender earns if it takes the keys tomorrow, and often the test that actually sizes your loan.
Loan to value and loan to cost. The lender’s cushion measured against what the asset is worth, and against what you are spending.
How long the payment is calculated over, versus when the loan is actually due. A 30-year amortization on a 5-year maturity means the real negotiation is the refinance.
Annual debt service divided by the loan amount. What the debt truly costs per dollar borrowed once amortization joins the rate.
Existing debt a buyer can take over. In a high-rate market, a below-market assumable loan is worth real money on its own.
The seller lends you part of the price and holds a note. The friendliest debt you will ever have, because the lender knows the property.
Money set aside at closing to make payments while a property stabilizes. Ask for it on any heavy value-add deal.
The partnership words
General partner runs the deal and carries the liability; limited partner supplies capital and stays passive. Pick your seat before you pick your deal.
The written order in which money is distributed. Most partner fights are a missing sentence here, not a missing dollar.
The percentage limited partners receive before the sponsor shares in profit. The pref protects the passive money first.
The sponsor’s share of profit above the preferred return, earned for finding and running the deal.
A request for partners to send more money mid-deal. Read how these work before you sign anything, on either side of the table.
A partnership formed for one deal, with roles and splits defined for that deal only. Simpler than a fund, and where most people should start.
The deal and market words
Your written filter: asset, geography, price band, minimum return, automatic disqualifiers. It turns every deal into a fast yes or a faster no.
The real ring your customers come from, usually three to five miles, bent by highways and commutes. Draw it before you trust any market statistic.
After-repair value. What the property is worth once the work is done, supported by real comps and not by optimism.
Buy, rehab, rent, refinance, repeat. Force value, pull your capital back out at the higher appraisal, keep the asset, go again.
Getting a property under contract and assigning that contract to an end buyer for a fee. A way to earn while you learn, if you do it honestly and legally.
The fill rate where income just covers expenses and debt. Your margin of survival; know it before you close.
The tax and structure words
A deduction for the wearing out of the building over time. It is why real estate income can be taxed more kindly than a paycheck.
A study that splits the property into components with shorter depreciation lives, front-loading deductions. Educational only; bring a real CPA.
An entity that owns other entities rather than operating anything itself. A clean way to hold interests across several deals.
A creditor remedy limitation in some states that keeps a personal judgment from reaching the entity itself. Part of why Wyoming shows up in so many structures.
None of this is legal or tax advice, and every state and lender has its own rules. It is the vocabulary, which is the part nobody gives you for free.
