Real estate glossary

Plain-English definitions for every term you'll meet in a deal.

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1% Rule: A screening guideline: monthly rent should equal at least 1% of purchase price for rentals.
1031 Exchange: An IRS-authorized swap of like-kind investment property that defers capital gains taxes.
180-Day Rule: The 1031 deadline to close on a replacement property after selling the relinquished property.
30/60/80 AMI: Common affordable housing income tiers used for unit set-asides.
3D Secure: Verified by Visa, Mastercard SecureCode — adds password verification to online purchases.
45-Day Rule: The 1031 deadline to identify replacement properties after closing on the relinquished property.

A

A.R.S. Title 32 Chapter 20: The Arizona Revised Statutes chapter that governs real estate licensing, transactions, and disclosures.
AAR: Arizona Association of REALTORS® — provides the standard contract forms used in most AZ transactions.
AAR Counter Offer: The standard AAR form used to modify and respond to a purchase offer in Arizona.
AAR Residential Resale Purchase Contract: The most common AZ contract form for resale single-family home purchases.
Absolute NNN: A lease where the tenant is responsible for absolutely all costs including structural repairs.
Acceleration: A lender's demand for the entire loan balance after default, kicking off foreclosure.
Acceleration Clause: A loan provision allowing the lender to demand full repayment upon default.
Accounts Payable (AP): Money a business owes to its suppliers for goods or services received.
Accounts Receivable (AR): Money owed to a business by its customers for goods or services delivered.
Accredited Investor: An investor meeting SEC income or net-worth thresholds, allowed to participate in private offerings.
Accrual Accounting: Recording revenue and expenses when earned/incurred, not when cash moves.
ACH Transfer: An electronic bank-to-bank transfer through the Automated Clearing House network.
Acquiring Bank: The merchant's bank that processes card transactions on their behalf.
Active Management Area (AMA): Designated AZ regions with strict groundwater regulations under the 1980 Groundwater Management Act.
Active vs. Passive Income: Active income comes from work; passive income comes from investments — taxed differently.
Actual Cash Value (ACV): Replacement cost minus depreciation — what the property is worth today.
Adaptive Reuse: Converting an existing building to a new use — e.g., warehouse to lofts.
Add-Back: Non-cash expenses added back to income when underwriting a self-employed borrower.
Addendum: An add-on document modifying or supplementing a real estate contract.
Adequate Water Supply Determination: Required disclosure outside Active Management Areas confirming a water supply for new subdivisions.
Adjustable-Rate Mortgage (ARM): A mortgage with an interest rate that changes periodically based on a benchmark index.
Adjustment: Dollar additions or subtractions to comparable sale prices to account for differences.
ADRE: Arizona Department of Real Estate — the state agency that regulates licensees and enforces real estate law.
ADRE Disciplinary Action: Penalties (fines, suspension, revocation) the ADRE Commissioner may impose for license violations.
ADU: Accessory Dwelling Unit — a secondary housing unit on a single-family lot (in-law suite, casita, garage apartment).
Advance Rate: The percentage of eligible collateral a lender will advance against, e.g., 80% on AR.
Adverse Possession: Acquiring legal ownership of land by openly using it without permission for a statutory period.
Adverse Possession Tacking: Combining consecutive periods of adverse possession by successive owners to meet the statutory term.
Affidavit: A sworn written statement, often used to confirm title matters at closing.
Affidavit of Affixture: An AZ filing converting a manufactured home from personal property to real property.
Affidavit of Property Value (APV): A document filed at AZ closings stating the sale price for assessor records.
AFFO: Adjusted Funds From Operations — FFO minus recurring capital expenditures.
After-Repair Value (ARV): The estimated value of a property after planned renovations are complete.
Agency Disclosure: Written notice required by most states explaining which party an agent represents.
Agency MBS: Mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac, or Ginnie Mae.
Aggregator: A payment provider (like Stripe or Square) that pools many small merchants under one account.
AI Lead Scoring: Machine learning models ranking prospects by likelihood to transact.
Air Rights: The legal right to use, control, or develop the space above a parcel of land.
All-Risk Policy: Insurance covering all risks except those specifically excluded.
Allodial System: A system of land ownership where individuals own land outright, free of government claim — the U.S. model.
ALTA: American Land Title Association — sets standards for title insurance policies and surveys.
ALTA Plain Language Closing Form: A simplified closing statement used in many Arizona transactions to make charges clear.
AMC: Appraisal Management Company — a third party that orders and reviews appraisals for lenders.
Amortization: The schedule of equal payments that gradually reduce the principal and interest over a loan's term.
Amortization Schedule: A timeline allocating intangible asset costs (or loan repayment) over time.
Anchor Tenant: The largest tenant in a retail center, often a national brand drawing customer traffic.
Ancillary Income: Income beyond rent — pet fees, parking, laundry, application fees.
Annexation: Attaching personal property to real estate so it becomes a fixture.
Annual Percentage Rate (APR): The yearly cost of a loan including interest and fees, expressed as a percentage.
Annual Renewal: The yearly review of a line of credit, with possible terms changes.
Annualized Return: Investment return expressed as an annual rate, smoothing multi-year periods.
Appraisal: A professional estimate of a property's market value.
Appraisal Gap: The difference between an offer price and a lower appraised value.
Area Median Income (AMI): The midpoint income for a metropolitan area, used to qualify affordable housing programs.
Arizona 20-Day Preliminary Notice: A required notice contractors must serve within 20 days to preserve mechanic's lien rights in AZ.
Arizona Anti-Deficiency Statute: A.R.S. §§ 33-729 & 33-814 protecting homeowners on 1-2 unit residential property up to 2.5 acres from deficiency judgments.
Arizona Condominium Act: A.R.S. Title 33 Chapter 9 — governs condominium creation, governance, and disclosures in AZ.
Arizona Conveyance Tax: Arizona does NOT impose a state transfer tax on real estate conveyances — a buyer-friendly feature.
Arizona Deed of Trust: The primary security instrument used in AZ home loans, with a trustee holding bare title.
Arizona HOA Open Meeting Law: A.R.S. § 33-1804 / § 33-1248 — requires planned community and condo associations to hold open board meetings.
Arizona Homestead Exemption: A.R.S. § 33-1101 — protects up to $400,000 of equity in a primary residence from most creditors.
Arizona Lien Priority: First-recorded liens generally have priority in Arizona, with some statutory exceptions for taxes and mechanics liens.
Arizona Lis Pendens Statute: A.R.S. § 12-1191 et seq. — governs the recording of notices of pending real estate lawsuits.
Arizona Mobile Home Parks Residential Landlord Tenant Act: A.R.S. Title 33 Chapter 11 — governs landlord-tenant rules in AZ mobile home parks.
Arizona Public Report: A required ADRE disclosure document for subdivided land of 6+ lots — buyers must receive it before closing.
Arizona Quiet Title Action: A lawsuit under A.R.S. § 12-1101 et seq. to resolve title disputes or clear defects.
Arizona Real Estate Recovery Fund: A consumer protection fund (A.R.S. § 32-2186) compensating victims of licensee fraud or misconduct.
Arizona Residential Landlord Tenant Act (ARLTA): A.R.S. Title 33 Chapter 10 — the law governing most residential rentals in Arizona.
Arizona Solar Easement: A recorded agreement protecting access to sunlight, recognized by A.R.S. § 33-439.
Arizona Trustee Sale: A non-judicial foreclosure under a deed of trust, the dominant foreclosure path in Arizona.
As-Is Sale: A sale where the seller will not make repairs and the buyer accepts the property in its current condition.
Assessment: The dollar value placed on a property by a local government for tax purposes.
Assessment Fee: Fees charged by Visa/Mastercard networks on each transaction, separate from interchange.
Asset Class Diversification: Holding different property types (multifamily, industrial, retail) to balance returns.
Asset-Based Lending: Lending based primarily on the value of collateral rather than borrower income.
Asset-Based LOC: A line of credit secured by accounts receivable and inventory, common for growing businesses.
Assignment: Transferring lease obligations to a new tenant who steps fully into the original tenant's place.
Assisted Living: Senior housing offering personal-care help with daily living activities.
Assumable Mortgage: A mortgage that a buyer can take over from the seller, often at the seller's existing rate.
Authorization: Initial approval of a transaction by the issuing bank, holding funds before settlement.
Automated Underwriting: Software-driven loan evaluation systems like Fannie Mae's DU and Freddie Mac's LPA.
AVM: Automated Valuation Model — software that estimates property value using public data and algorithms.
AZ Assured Water Supply Designation: Required certification in Active Management Areas that a 100-year water supply exists for new subdivisions.
AZ Form 200 (Counter Offer): Standard AAR counter offer form used to modify and respond to offers in Arizona residential transactions.
AZ Special Detainer Action: The Arizona name for the eviction lawsuit filed in Justice Court after notice has expired.

B

B-Piece Buyer: An investor purchasing the riskiest tranche of a CMBS deal, getting rights to influence underwriting.
Back-End DTI: Total monthly debt payments (housing + other) divided by gross monthly income.
Backup Offer: An offer accepted as second priority in case the primary contract falls through.
Bad Debt: Rent that cannot be collected, written off as a loss.
Bad-Boy Carve-Out: Non-recourse loan exceptions triggered by fraud, waste, or misrepresentation.
Balance Sheet: A snapshot of a company's assets, liabilities, and equity at a point in time.
Balloon Mortgage: A loan with smaller initial payments and a large final payment of the remaining balance.
Bank Statement Loan: A non-QM loan that qualifies borrowers using bank statements instead of tax returns.
Bargain and Sale Deed: A deed that implies the seller has title but provides no explicit warranties.
Base Year: The reference year for measuring future operating expense increases in a lease.
Bench Mark: A surveyor's permanent reference point of known elevation.
Beneficiary (Trust Deed): The lender named in a deed of trust who benefits from the security interest.
Beneficiary Deed (AZ): A.R.S. § 33-405 — an AZ deed that transfers property at death without probate, revocable during life.
Beta: A measure of an investment's volatility relative to the broader market.
Bidding: The process by which contractors submit price proposals for a defined scope of work.
Big-Box Retail: Large freestanding retail stores typically 50,000+ square feet.
Bill of Sale: A document transferring ownership of personal property included with the real estate sale.
BINSR: Buyer's Inspection Notice and Seller's Response — the AZ form used to negotiate repairs after inspection.
Blanket Mortgage: A single mortgage covering multiple properties.
Blockchain Title: Recording property titles on a blockchain to improve transparency and reduce fraud.
Bond for Deed: An installment land contract where the buyer takes possession but the seller retains title until paid.
Bonus Depreciation: An accelerated tax deduction allowing first-year write-off of qualifying property components.
Boot: Cash or non-like-kind value received in a 1031 exchange that triggers taxable gain.
Borrowing Base: Eligible collateral value (receivables + inventory) determining LOC availability.
Boundary Dispute: A disagreement between neighboring owners about where a property line lies.
Branch Manager (AZ): A self-employed broker designated to supervise a brokerage's branch office in Arizona.
Break-Even Ratio: Operating expenses plus debt service divided by gross income, the point at which a property covers its costs.
Bridge Capital: Short-term funding to bridge a gap between immediate needs and longer-term financing.
Bridge Loan: Short-term financing used to bridge the gap between buying a new property and selling another.
Broker: A licensed professional who can supervise other agents and run an independent brokerage.
Broker Trust Account: An AZ-required separate account holding earnest money and client funds, audited by ADRE.
Broker's Price Opinion (BPO): A broker's estimate of value, less formal than a full appraisal.
Brownfield Site: Land previously developed and possibly contaminated, often requiring remediation.
Brownstone: A row house, typically 3-5 stories, faced with reddish-brown sandstone — common in NYC and Boston.
BRRRR: Buy, Rehab, Rent, Refinance, Repeat — a strategy to recycle capital across multiple rentals.
Build-for-Rent Community: A community of newly constructed homes designed and operated as rentals.
Build-to-Rent (BTR): Single-family rental communities built specifically for long-term tenants.
Build-to-Suit: A property constructed to a tenant's specifications under a pre-arranged lease.
Builder's Risk Insurance: Coverage protecting a structure under construction from damage.
Builders Risk Course of Construction: Coverage during the construction period for materials and work in progress.
Building Management System (BMS): Software controlling a building's HVAC, lighting, and security from one platform.
Bulk Warehouse: Industrial property with high ceilings and large floor plates for storage and distribution.
Bundle of Rights: The set of legal rights that come with property ownership — possession, control, exclusion, enjoyment, and disposition.
Bungalow: A small one or one-and-a-half-story house with a porch.
Burn Rate: The rate at which a company spends cash, often used in startups.
Business Plan: A required document detailing the business's strategy, financials, and operations.
Business Valuation: Determining a company's fair market value using income, market, or asset approaches.
Buy and Hold: Acquiring property to hold long term for rental income and appreciation.
Buy, Borrow, Die: A tax strategy of holding appreciating assets, borrowing against them, and passing them on with stepped-up basis.
Buydown: Prepaying interest at closing to temporarily reduce the loan rate.
Buyer's Agency Agreement: A contract formalizing the relationship between a buyer and their agent.
Buyer's Agent: A real estate professional representing the buyer in a transaction.
Bylaws (HOA): The rules governing operation of a homeowners or condo association.

C

Cancellation Notice (AAR): The standard AAR form for canceling a residential purchase contract per its terms.
Cancellation Option: A tenant's right to terminate the lease early, usually with notice and a fee.
Cannabis Real Estate: Properties used for legal cannabis cultivation, processing, or dispensary — highly regulated.
Cap Rate: Net operating income divided by purchase price — a basic measure of unleveraged yield.
Cap Table: A spreadsheet showing all equity holders and their ownership percentages.
Cap Table Dilution: Reduction in existing owners' percentage stake when new equity is issued.
Capacity: A borrower's ability to repay a loan based on income and other obligations.
Cape Cod Style: A small, symmetrical house style with steep roof and central chimney, popular in New England.
Capital (Underwriting): A borrower's savings or assets available beyond what's needed for a transaction.
Capital Call: A formal request to investors to fund a previously committed amount.
Capital Expenditure (CapEx): Major investments in a property such as a new roof, HVAC, or renovation.
Capital Gains Tax: A tax on profit from the sale of an asset held longer than one year.
Capital Lease: A lease treated as an asset purchase with associated debt on the balance sheet.
Capital Stack: The layered structure of debt and equity used to finance a real estate deal.
Captive Insurance: Self-insurance through a subsidiary insurance company owned by the insured.
Capture: The completion of a transaction, moving from authorization to settlement.
Card-Not-Present Transaction: A transaction without the physical card (online, phone) — higher fraud risk and fees.
Card-Present Transaction: A transaction where the card is physically swiped, dipped, or tapped — generally lower risk.
Cardholder: The person who owns a credit or debit card and is responsible for transactions.
Carried Interest: The share of profits paid to a fund manager, typically taxed at favorable capital-gains rates.
Cash Accounting: Recording revenue and expenses only when cash changes hands.
Cash Boot: Cash received in a 1031 exchange that is taxable.
Cash Conversion Cycle: Days inventory + DSO - DPO; how long cash is tied up in operations.
Cash Discount Program: A pricing structure where card-paying customers see higher prices than cash customers.
Cash Flow: The net amount of cash moving in and out of a property, after operating expenses and debt service.
Cash Flow Statement: A financial report showing cash inflows and outflows from operations, investing, and financing.
Cash for Keys: A lender's offer to pay a defaulting owner or tenant to vacate cooperatively.
Cash Sweep: A provision directing excess cash flow to debt paydown or investor distributions.
Cash-on-Cash Return: Annual pre-tax cash flow divided by total cash invested.
Cash-Out Refinance: A refinance for more than the existing loan balance, with the difference paid in cash to the borrower.
Casita: A small detached guest house or accessory dwelling, common in southwestern architecture.
Catch-Up: A waterfall provision that allows the sponsor to receive a higher share until parity with the LPs.
Caveat Emptor: Latin for "let the buyer beware" — the traditional doctrine of buyer responsibility.
CC&Rs: Covenants, Conditions & Restrictions — HOA rules governing a community.
CDFI: Community Development Financial Institution — a specialized lender serving underserved communities.
Certificate of Occupancy (CO): A local government document certifying a building is safe and ready for occupancy.
Chain of Title: The historical sequence of ownership transfers for a property.
Change Order: A modification to the original construction contract, often with cost and schedule impacts.
Character (Underwriting): A borrower's credit history and reputation for repaying obligations.
Chargeback: A forced reversal of a card transaction initiated by the cardholder's bank.
Charter School Property: Real estate leased to charter schools, often via long-term net leases.
Class A Office: The highest quality office buildings — newest, best locations, top amenities.
Class A Units: Senior equity units with priority distribution rights in a partnership.
Class A/B/C Multifamily: Quality classifications based on age, amenities, and rents — A is newest, C is older.
Class B Office: Mid-tier office buildings — older but well-maintained with good locations.
Class B Units: Junior equity units that participate in distributions after Class A.
Class C Office: Older buildings in less desirable locations, typically with lower rents.
Clawback: A provision requiring the sponsor to return prior profits if final returns fall below targets.
Cleanup Requirement: A LOC provision requiring the balance to reach zero for a period each year.
Clear to Close (CTC): Final underwriter approval — all conditions met, ready to schedule closing.
Closed-End Fund: A fund with a fixed pool of capital raised once and returned to investors over time.
Closing: The final step of a real estate transaction when title transfers and funds change hands.
Closing Costs: Fees paid at closing, typically 2-5% of the purchase price, covering title, lender, escrow, and recording.
Closing Disclosure (CD): A federally required form detailing final loan terms and closing costs, delivered at least 3 days before closing.
Closing Statement: Final accounting of who pays what at closing — replaced by the Closing Disclosure for most loans.
Closing the Loan: The point at which all loan documents are signed and funds disbursed.
Cloud on Title: Any claim or encumbrance that may impair the marketability of a property's title.
CMBS: Commercial Mortgage-Backed Security — a bond backed by a pool of commercial mortgages.
Co-Living: A housing concept where residents have private bedrooms and share common areas, common in urban markets.
Co-Tenancy Clause: A retail lease term that adjusts rent if anchor tenants leave or occupancy drops.
Coinsurance Penalty: A reduction in claim payment when a property is insured for less than its required percentage of value.
Cold Shell: A leased space with bare floors, ceilings, and walls — no MEP systems installed.
Cold Storage: Refrigerated warehousing for perishable goods — a fast-growing industrial niche.
Collateral: An asset pledged as security for a loan, which the lender can seize on default.
Collateralized Loan Obligation (CLO): A securitization pool of corporate loans, including some commercial real estate debt.
Colonial Style: A traditional symmetrical house style with multi-story formal layout.
Combined Loan-to-Value (CLTV): The sum of all loans against a property divided by the property's value.
Commission: Compensation paid to brokers, typically a percentage of the sale price.
Commission Split: How brokerage commission is divided between the broker and the agent.
Commissioner's Rules: Administrative regulations adopted by the ADRE Commissioner governing real estate practice in Arizona.
Common Area Maintenance (CAM): Charges paid by tenants for upkeep of shared areas in commercial properties.
Common Equity: Ownership stake last in line for distributions but with unlimited upside.
Community Advantage Loan: An SBA 7(a) loan available to underserved small businesses through mission-based lenders.
Community Facilities District (CFD-AZ): An Arizona special taxing district financing infrastructure for a new development.
Community Property: A form of ownership in certain states where property acquired during marriage is jointly owned.
Community Property (AZ): Property acquired during marriage in Arizona, presumed jointly owned by both spouses.
Community Property with Right of Survivorship (CPWROS): An Arizona vesting that combines community property tax benefits with automatic survivorship.
Comparable Sale (Comp): A recently sold property similar in size, location, and condition used for valuation.
Comparative Market Analysis (CMA): An agent's report comparing recent sales to estimate a listing or offer price.
Compensating Factors: Positive borrower attributes (large reserves, low DTI) that offset weaker areas of an application.
Compliance Period: The years a LIHTC property must maintain affordability — typically 15+15.
Concession: A discount or incentive offered to attract or retain tenants, such as one month free.
Conditional Approval: Underwriter approval pending submission of specific documents or clarifications.
Conditions (Underwriting): External factors a lender considers, such as loan purpose, market conditions, and economy.
Condominium: An individually owned unit within a larger building, with shared ownership of common areas.
Conforming Loan: A mortgage that meets the size and underwriting guidelines set by Fannie Mae and Freddie Mac.
Construction Loan: Short-term financing used to build a structure, typically converted to a permanent loan upon completion.
Construction-to-Perm Loan: A single closing that funds construction then converts to a permanent mortgage.
Constructive Receipt: An IRS doctrine treating taxpayers as receiving income they could control, even if not yet collected.
Contactless Payment: Tap-to-pay transactions using NFC technology — cards or mobile wallets.
Contingency: A condition that must be met before a contract becomes binding (inspection, financing, appraisal).
Contract for Deed: Another name for a land contract — seller financing without immediate title transfer.
Convenience Fee: A fixed fee for using a non-standard payment method, allowed in many cases.
Conventional Loan: A mortgage not insured or guaranteed by a federal government agency.
Convertible Debt: Loans that can convert into equity under specific conditions.
Convertible Note: Debt that can convert to equity, typically at a future financing event.
Convertible Preferred: Preferred equity that can convert to common equity under specified terms.
Cooperating Broker: A broker who represents the buyer and shares commission with the listing broker.
Cooperating Commission: The portion of commission offered to the buyer's broker by the listing broker.
Cooperative (Co-op): Housing where residents own shares in a corporation that owns the building, granting them occupancy rights.
Core Investment: A high-quality, fully leased asset in a strong market — lowest risk, lowest expected return.
Correspondent Lender: A lender that originates and funds loans then sells them to investors.
Cost Approach: A valuation method estimating the cost to rebuild less depreciation, plus land value.
Cost Segregation: A study that accelerates depreciation by separately classifying building components.
Cost-Plus Contract: Contractor is paid actual costs plus a markup or fee.
Counteroffer: A new offer made in response to a previous one, rejecting the original terms.
Covenant Compliance: Adherence to financial ratios and reporting required by a credit agreement.
CPI-Adjusted Rent: Rent increases tied to the Consumer Price Index inflation measure.
Craftsman Style: A home style featuring handcrafted woodwork, low-pitched roofs, and natural materials.
Credit Limit: The maximum amount available to borrow under a line of credit.
Credit Score Tiers: Common bands: 760+ excellent, 700-759 good, 660-699 fair, below 660 challenging.
Credit Utilization: The percentage of available credit currently in use.
Crime Insurance: Coverage for theft, fraud, or employee dishonesty.
Critical Path: The longest sequence of tasks that determines a project's minimum duration.
CRM (Real Estate): Customer relationship management software helping agents track leads and clients.
Cross-Border Fee: An additional fee assessed on international card transactions.
Cross-Collateralization: Using one asset as collateral for multiple loans, or multiple assets to secure one loan.
Cross-Default: A loan provision triggering default on one loan if another loan is in default.
Crowdfunding: Raising small amounts of capital from many people, often online.
Crypto Mining Facility: Industrial property with massive power capacity designed for cryptocurrency mining.
Cumulative Return: Total return over an entire holding period without annualizing.
Curb Appeal: The visual attractiveness of a property when viewed from the street.
Cure or Quit Notice: A notice giving a tenant time to remedy a lease violation or vacate.
Currency Conversion Fee: A fee added to international transactions to convert currencies.
Current Ratio: Current assets divided by current liabilities — a measure of short-term liquidity.
Cyber Liability: Insurance for data breaches and cyberattacks, increasingly required by lenders.

D

D&O Insurance: Directors and Officers insurance protecting executives from personal liability claims.
Daily ACH Debit: MCA repayment method automatically debiting from business bank account daily.
Daily Repayment: Short-term loan repayment structure with small daily ACH debits.
Data Center: A facility purpose-built to house computer servers, with heavy power and cooling demands.
Days on Market (DOM): The number of days a listing remains active before going under contract.
Debt Stack: All outstanding obligations a borrower carries, considered together in underwriting.
Debt Yield: Net operating income divided by loan amount, used by commercial lenders.
Debt-Service Coverage Ratio (DSCR): Net operating income divided by total debt service — a key commercial underwriting metric.
Debt-to-Equity Ratio: Total debt divided by shareholders' equity, showing leverage.
Debt-to-Income Ratio (DTI): Monthly debt obligations divided by gross monthly income, used to gauge borrowing capacity.
Deductible: The amount the policyholder pays out of pocket before insurance coverage kicks in.
Deed: The legal document that transfers ownership of real property from one party to another.
Deed in Lieu: A voluntary transfer of property to the lender to avoid foreclosure.
Defeasance: Substituting government securities for collateral to release the original property from a CMBS lien.
Deferment: An arrangement that moves missed payments to the end of the loan term.
Deficiency Judgment: A court order making a borrower personally liable for the loan balance after foreclosure sale.
Delaware Statutory Trust (DST): A trust holding investment-grade real estate, eligible for 1031 exchanges.
Demand Line of Credit: A line of credit that can be called for repayment at any time.
Depreciation: An annual tax deduction representing the wear and tear of an income-producing property.
Depreciation Schedule: A timeline allocating an asset's cost across its useful life for tax purposes.
Design Development (DD): Mid-stage drawings refining materials, systems, and details.
Designated Agency: Different agents within one brokerage representing buyer and seller separately.
Designated Broker (AZ): The single broker legally responsible for an Arizona brokerage's compliance and supervision.
Desktop Appraisal: An appraisal conducted entirely from existing data and photos, no site visit.
Digital Twin: A virtual replica of a physical property used for design, monitoring, or maintenance.
Disclaimer Deed: An AZ deed where a non-titled spouse formally disclaims any community-property interest.
Disclosure Statement: A seller's written statement about a property's known defects and history.
Discount Rate: The interest rate used to discount future cash flows to present value.
Discount Rate (Payments): The percentage a merchant pays per transaction to its processor.
Discounted Cash Flow (DCF): A valuation technique using projected cash flows discounted to present value.
Disposable Income: Income remaining after taxes, used in some manual underwriting calculations.
Distributable Cash: Cash available to pay investors after debt service and reserves.
Distribution Frequency: How often (monthly, quarterly, annually) investors receive cash distributions.
Distributions in Kind: Paying investors in assets (often property) instead of cash.
Dividend Yield: Annual dividend per share divided by stock price.
Doctrine of Emblements: A tenant farmer's right to harvest annual crops planted during the tenancy.
Domestic Well (Exempt Well): A small AZ well pumping under 35 GPM, exempt from most groundwater permitting.
DownREIT: A REIT structure with separate partnerships for individual properties.
DPA Program: Down Payment Assistance — government or nonprofit programs helping cover the down payment.
DPI: Distributions to Paid-In capital — total cash returned to investors divided by total invested.
DPO: Days Payables Outstanding — average days to pay suppliers.
Drag-Along Right: A provision letting majority investors force minority owners to join in a sale.
Draw Period: The window during which a borrower can pull funds from a line of credit.
Draw Schedule: A pre-agreed timetable for releasing rehab or construction funds as work progresses.
Drive-By Appraisal: An exterior-only appraisal, used for some refinances and home equity loans.
Drone Photography: Aerial imagery for real estate marketing, particularly for large properties.
Drop and Swap: Restructuring partnership interests so partners can independently do 1031 exchanges.
Dry Settlement: Documents are signed but funds disburse a few days later, common in some western states.
DSCR Loan: An investment-property loan qualified by the property's debt-service coverage ratio, not borrower income.
DSO: Days Sales Outstanding — average days to collect receivables.
Dual Agency: When one agent or brokerage represents both buyer and seller in the same transaction.
Dual Pricing: Showing both a card price and a cash price at checkout, compliant alternative to surcharging.
Due-on-Sale Clause: A loan provision requiring full repayment when the property is sold.
Duplex: A residential building containing two separate units, often with separate entrances.

E

E-Closing: Real estate closings conducted fully or partly digitally with electronic signatures.
Earnest Money: A buyer's good-faith deposit, held in escrow and credited toward closing costs.
Earthquake Insurance: Specialty coverage for earthquake damage, typically a separate policy.
Easement: A legal right to use another person's land for a specific purpose, such as a utility line or shared driveway.
Easement Appurtenant: An easement attached to the land that transfers with ownership.
Easement by Necessity: An easement created when property would be landlocked without it.
Easement by Prescription: An easement acquired through long-term, open, hostile use.
Easement in Gross: A personal easement that doesn't transfer with property — like utility easements.
EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization — a profitability measure.
Economic Obsolescence: A decline in value caused by external factors like neighborhood decline or zoning changes.
Economic Vacancy: Lost income from vacancies, concessions, bad debt, and below-market rents combined.
Effective Age: An appraiser's estimate of a property's age based on its condition, not actual years.
Effective Date of Value: The date the appraised value reflects, not necessarily the inspection date.
Effective Gross Income (EGI): Gross potential income minus vacancy and credit losses, plus other income.
Effective Rent: Average rent over the lease term, accounting for free rent and concessions.
Electronic Signatures (E-Sign): Digital signatures legally binding under the U.S. E-SIGN Act and UETA.
ELI: Extremely Low Income — households earning under 30% of AMI.
Eligibility Requirements (SBA): Standards a business must meet for SBA loan programs — size, type, and use of proceeds.
Eminent Domain: The government's right to take private property for public use, with just compensation.
EMV: The chip-card standard for secure card-present transactions.
Encroachment: An unauthorized intrusion of a structure or improvement onto a neighbor's property.
Encumbrance: Any claim, lien, charge, or liability attached to real property that may diminish its value or use.
Endorsement: An amendment to an insurance policy adding or modifying coverage.
Entitlements: Government approvals (zoning, permits, density) that grant the right to develop a property.
Equipment Financing: A loan or lease used specifically to purchase business equipment, secured by the equipment.
Equity Bridge: Short-term financing used by sponsors before calling LP capital.
Equity Cushion: The owner's existing equity providing extra security to a private lender.
Equity Kicker: An equity participation added to a debt instrument as a return enhancer.
Equity Multiple: Total cash distributions divided by total equity invested over the life of an investment.
Equity of Redemption: The borrower's right to cure default before foreclosure sale.
Equity REIT: A REIT that directly owns and operates income-producing real estate.
Errors and Omissions (E&O): Professional liability insurance for real estate agents, brokers, and other service providers.
Escalation Clause: A lease provision that increases rent annually based on a formula or index.
Escheat: The reversion of property to the state when an owner dies without heirs or a will.
Escrow: A neutral third party that holds funds and documents until contract conditions are met.
Escrow Account: A separate account a lender uses to collect and disburse taxes and insurance.
Escrow Holdback: Funds withheld at closing to cover anticipated repairs or contingencies.
Escrow Officer: The neutral professional managing escrow for a real estate closing.
Estate: The degree, nature, and extent of an owner's interest in real property.
Estoppel Certificate: A tenant statement confirming lease terms and any defaults, used in sales or financing.
EV Charging Hub: Real estate dedicated to electric vehicle charging stations, a fast-growing niche.
Eviction: The legal process by which a landlord removes a tenant who has violated the lease.
Exclusive Right to Sell: The most common listing agreement, paying the broker regardless of who finds the buyer.
Exclusive Use: A retail lease provision preventing the landlord from leasing nearby space to direct competitors.
Exit Cap Rate: The cap rate assumed at sale, used to estimate terminal value in projections.
Exit Strategy: The plan for paying off a short-term loan — refinance, sale, or new financing.
External Management: REIT structure where management services are provided by a separate company.

F

Face Rent: The stated rent in a lease before deductions or concessions.
Factor Rate: MCA pricing expressed as a multiple of the funded amount, not an APR.
Factoring: Selling accounts receivable to a third party at a discount for immediate cash.
Fair Housing Act: Federal law prohibiting housing discrimination based on protected classes.
Feasibility Study: An analysis determining whether a proposed development is financially and physically viable.
Fee Simple: The most complete form of ownership in real estate — unlimited duration, freely transferable.
FFO: Funds From Operations — a REIT's profitability measure that adds depreciation back to net income.
FHA Loan: A mortgage insured by the Federal Housing Administration with lower down-payment requirements.
FICO Score: A credit score model developed by Fair Isaac Corporation, ranging from 300 to 850.
Fiduciary Duty: An agent's legal obligation to act in their client's best interest with loyalty and care.
Final Walkthrough: Last buyer inspection of the property before closing to confirm condition.
Five-Day Health & Safety Notice: An AZ notice for material health and safety violations by a tenant.
Five-Day Notice: An AZ landlord's notice for nonpayment of rent under ARLTA before eviction may proceed.
Fix and Flip: Buying distressed property, renovating, and reselling quickly for a profit.
Fix-and-Flip Loan: A short-term loan to acquire and renovate a property for quick resale.
Fixed-Rate Mortgage: A loan whose interest rate remains the same for the entire term.
Fixture: An item of personal property that becomes part of real property by being permanently attached.
Flat Rate Pricing: Simple, single-rate pricing across all card types — easier but often more expensive.
Flex Industrial: Hybrid industrial property suitable for light manufacturing, distribution, or office use.
Flex Space: Industrial property combining office, warehouse, and light manufacturing in one unit.
Float-Down Option: A provision allowing the borrower to reduce the locked rate if market rates fall.
Flood Insurance: A separate policy covering damage from flooding, required in FEMA-designated flood zones.
Forbearance: A temporary pause or reduction in mortgage payments granted by a lender.
Force Majeure: A clause excusing performance due to events like natural disasters or pandemics.
Forced Appreciation: Increasing a property's value through improvements or operational gains, not market growth.
Foreclosure: The legal process by which a lender takes ownership of a property after the borrower defaults.
Fourplex: A residential building with four separate dwelling units — still considered residential for financing.
Fraud Filters: Rules-based or AI-driven systems screening transactions for suspicious patterns.
Free Cash Flow: Cash from operations minus capital expenditures — the cash truly available.
Free Rent: Months at the start of a lease where no rent is owed, used as an incentive.
Free Rent Period: A concession giving the tenant rent-free occupancy at the start of a lease.
Front-End DTI: Housing-related monthly costs divided by gross monthly income.
Functional Obsolescence: A decline in value due to outdated features or poor design relative to current preferences.
Functional Square Footage: Usable interior space, excluding garages, basements, or unfinished areas.
Fund of Funds (FoF): An investment vehicle that invests in multiple real estate funds for diversification.
Funder: The lender's representative who releases loan funds at closing once conditions are met.

G

Gap Funding: Capital that fills the difference between a senior loan and the borrower's available equity.
Garden Apartment: A low-rise multifamily building, typically 2-3 stories surrounded by landscaped grounds.
Garden-Style Office: Low-rise suburban office buildings, typically with surface parking.
Gateway Fee: Per-transaction charge by a payment gateway, in addition to processor fees.
General Contractor (GC): The lead contractor responsible for overseeing a construction project's day-to-day execution.
General Liability Insurance: Protects property owners from third-party bodily injury and property damage claims.
General Partner (GP): The active managing partner in a partnership with full liability and operational control.
Geographic Diversification: Spreading investments across different markets to reduce concentration risk.
Ghost Kitchen: A commercial kitchen serving delivery-only food businesses, leased as specialty industrial.
Gift Letter: Documentation confirming that down-payment funds were a gift, not a loan.
GMP Contract: Guaranteed Maximum Price — contractor caps total cost regardless of overruns.
Going-In Cap Rate: The cap rate at acquisition, based on Year 1 NOI and purchase price.
Goodwill: An intangible asset reflecting a business's value beyond identifiable assets.
Grant Deed: A deed conveying ownership with a limited warranty against prior conveyances and undisclosed encumbrances.
Greenfield Development: Building on undeveloped land that has not previously been built upon.
GRM: Gross Rent Multiplier — sale price divided by gross annual rent, a quick valuation tool.
Gross Lease: A lease where the landlord pays all operating expenses out of the rent collected.
Gross Profit Margin: Gross profit as a percentage of revenue — a basic profitability measure.
Gross Rent Multiplier (GRM): Property price divided by gross annual rental income — a quick valuation screen.
Gross Square Footage: Total measurement including all interior and structural areas.
Gross Up Provision: A lease clause that adjusts expense reimbursements as if the building were fully occupied.

H

Habitable Standards: Minimum legal requirements for a rental's safety and livability.
Hard Costs: Tangible construction expenses such as materials, labor, and site work.
Hard Hat Tour: A construction site walkthrough for investors or buyers during the build.
Hard Money Loan: A short-term, asset-based loan from a private lender, typically at higher rates than banks.
Hard Pref: A non-cumulative preferred return that doesn't accrue if unpaid.
Hard Pull: A credit inquiry that may affect a credit score, usually for new credit applications.
Healthcare REIT: A REIT specializing in medical office, hospitals, and senior living properties.
HELOC: Home Equity Line of Credit — a revolving credit line secured by the equity in a home.
High-Balance Loan: A conforming loan exceeding the standard limit in high-cost areas.
High-Rise: A building of 10+ stories, usually with an elevator and structured parking.
Highest and Best Use: The legally permissible, financially feasible use that produces the greatest value.
Highest and Best Use Analysis: Evaluating which legal use of a site would generate the greatest value.
HOA Resale Disclosure (AZ): Documents an Arizona HOA must furnish to the seller of a unit before closing.
Hold Harmless Clause: A lease provision releasing one party from liability for certain claims.
Hold Period: The expected length of time investors keep their capital in a deal before exit.
Holdback: Loan proceeds held in reserve and released as construction or rehab milestones are met.
Holdback Percentage: The fixed percentage of credit card sales an MCA company takes for repayment.
Holdover Tenant: A tenant who remains in possession after the lease has expired.
Home Equity Loan: A lump-sum second mortgage secured by home equity, typically at a fixed rate.
HOME Program: A federal block-grant program funding state and local affordable housing efforts.
Homeowner's Insurance: Coverage protecting a home and personal property against losses from fire, theft, and liability.
Homestead: A legal designation that protects a primary residence from certain creditors and may provide tax benefits.
Horizontal Construction: Site work — grading, utilities, roads — preparing land for vertical construction.
Hospitality Property: Hotels, motels, and short-term lodging facilities operated for transient guests.
House Hacking: Living in part of a multi-unit property while renting out the rest to offset costs.
HUD: U.S. Department of Housing and Urban Development — the federal agency for housing policy.
Hurdle (Multiple): A specified equity multiple a deal must exceed before the sponsor earns the next promote tier.
Hurdle Rate: The minimum acceptable rate of return for an investment to proceed.
Hybrid ARM: A loan with a fixed rate for an initial period (3, 5, 7, or 10 years) then adjusts.

I

iBuyer: A company that uses algorithms to make instant cash offers on homes, then resells them.
Identification Rules: The 3-property, 200%, or 95% rules limiting what a 1031 exchanger can identify.
Implied Warranty of Habitability: The legal doctrine that landlords must keep rentals safe and livable.
Improvement 1031: A 1031 exchange that includes construction or renovations within the 180-day window.
Inclusionary Zoning: A local rule requiring developers to include affordable units in new projects.
Income Approach: A valuation method using a property's income stream and an appropriate cap rate.
Income Documentation: W-2s, tax returns, pay stubs, and bank statements used to verify a borrower's earnings.
Income Statement: A financial report showing revenues, expenses, and profit over a period.
Indemnification: A contractual promise to compensate another party for specified losses.
Independent Living: Senior housing for active retirees needing little or no medical assistance.
Industrial Property: Real estate used for manufacturing, warehousing, distribution, or research.
Inland Marine Insurance: Coverage for portable property and tools, often used by contractors.
Inquiries: Records of credit checks — too many in a short window can lower scores.
Interchange Fee: The fee a merchant's bank pays to a cardholder's bank when a card is used.
Interchange Plus Pricing: Transparent processor pricing showing interchange fees plus a fixed markup.
Interest Rate: The percentage charged by a lender for borrowing money, expressed annually.
Interest Reserve: Loan funds set aside to cover interest payments during a rehab or construction period.
Interest-Only Loan: A loan where the borrower pays only interest for a period before principal payments begin.
Internal Management: REIT structure where the management team is employed directly by the REIT.
Internal Rate of Return (IRR): The annualized return that makes the net present value of all cash flows zero.
Inventory Financing: A loan secured by inventory, helping businesses stock up before peak season.
Inventory Turnover: Cost of goods sold divided by average inventory — measures how fast inventory sells.
Investor Pro Rata: Investors investing in proportion to their existing ownership share.
Invoice Financing: Borrowing against unpaid invoices to access working capital quickly.
Issuing Bank: The bank that issued a card to the cardholder.

J

J-Curve: The early dip in fund returns before assets mature and produce gains.
Joint Tenancy: Co-ownership of property with right of survivorship — when one owner dies, their share passes to the others.
Joint Venture (JV): A business arrangement where two or more parties pool resources for a specific project.
Judicial Foreclosure: A court-supervised foreclosure required in some states.
Jumbo Loan: A mortgage that exceeds the conforming loan limits and is therefore non-conforming.
Junior Tranche: Lower-priority debt repaid after senior tranches, with higher yields.

L

Lady Bird Deed: An enhanced life estate deed allowing the owner to retain control and avoid probate.
Land: Raw or undeveloped real property without significant improvements.
Land Banking: Holding land for future development or appreciation rather than current use.
Land Contract: A seller-financed agreement where the buyer makes payments and gets title after full payment.
Land Flipping: Buying raw land below market value and reselling at a markup.
Landlord Insurance: Coverage for rental property owners, including liability and loss of rental income.
Last Money In: Late-stage capital with priority distribution rights to compensate for risk and timing.
Last-Mile Industrial: Smaller distribution properties near urban areas serving same-day or next-day delivery.
Last-Mile Logistics: Distribution facilities located near population centers for fast delivery.
Late Fee: A penalty charged when rent is paid after the contractual grace period.
Latent Defect: A property defect not visible on inspection that the seller may be legally required to disclose.
Lateral Support: A landowner's right to have adjacent land naturally support their own.
Layered Risk: Loans with multiple high-risk factors (low credit, high LTV, low reserves) requiring extra scrutiny.
Lazy 1031: Offsetting capital gains with cost-segregation losses on a new property instead of doing a formal 1031.
Lead Generation Platform: Software systems generating buyer/seller leads for real estate agents.
Lead-Based Paint Disclosure: A federal disclosure for homes built before 1978 regarding lead-based paint hazards.
Lease Abstract: A one-page summary of key lease terms — useful for property management.
Lease Audit: A review of lease compliance, especially for CAM charges and pass-through expenses.
Lease Buyout: A payment to a tenant to terminate a lease early.
Lease Commencement: The date a tenant officially begins paying rent and occupying space.
Lease Option: A lease that gives the tenant the right to purchase the property at a set price during the lease.
Lease Renewal: An extension of an expiring lease, often with negotiated rent and term changes.
Lease Term: The length of time a tenant is contractually obligated to occupy a property.
Lease-Up: The period of leasing newly built or renovated space until stabilization.
Leasehold: An interest in real estate that gives the holder the right to use the property for a specified period under a lease.
Leasing Fee: A separate fee charged when a property manager places a new tenant.
Lender Credit: Money the lender pays toward closing costs in exchange for a higher interest rate.
Lender Inspection: A periodic site visit by the hard-money lender to verify construction progress.
Lender Owned: Another term for REO property — owned by the lender after foreclosure.
Lender's Title Policy: Title insurance protecting the lender against title defects, typically required at closing.
Letter of Intent (LOI): A non-binding outline of major lease terms before drafting a full lease.
Level 2 Processing: Sending additional transaction data (PO numbers, tax) to qualify for lower B2B rates.
Level 3 Processing: Even more detailed line-item data for B2B/government transactions, securing the lowest rates.
Levered Cash-on-Cash: Annual cash flow after debt service divided by equity invested.
Levered IRR: The IRR of an investment using debt financing, which can amplify returns and risk.
Levered Yield on Cost: Stabilized NOI minus debt service divided by equity invested.
Lien: A legal claim against a property used as collateral or security for a debt.
Life Estate: An ownership interest that lasts for the lifetime of a specified person.
Life Sciences Real Estate: Laboratory and R&D space designed for biotech and pharmaceutical tenants.
Lifestyle Center: An open-air retail center with upscale shops, dining, and pedestrian features.
LIHTC: Low-Income Housing Tax Credit — a federal program incentivizing affordable rental development.
Like-Kind Property: Real estate held for investment or business — required for a 1031 exchange.
Limited Partner (LP): A passive investor in a partnership with liability limited to their investment.
Line of Credit (LOC): A revolving loan with a set limit, drawable and repayable as needed.
Liquid Assets: Assets quickly convertible to cash — bank accounts, money market, brokerage.
Liquidated Damages: Pre-agreed daily fees the contractor pays if a project finishes late.
Lis Pendens: A public notice that a lawsuit affecting title to a property has been filed.
Listing Agreement: A contract authorizing a broker to market and sell a property.
Listing Broker: The broker who represents the seller in a transaction.
Listing Syndication: Distributing a property listing to multiple third-party portals automatically.
Listing-to-Sale Ratio: Sale price divided by list price — a measure of negotiation room in a market.
Littoral Rights: The rights of property owners whose land borders a non-flowing body of water like a lake or ocean.
Live-In Flip: Living in a renovating property as a primary residence to qualify for the Section 121 exclusion on sale.
Loan Application (1003): The standardized residential loan application form used industry-wide.
Loan Estimate (LE): A standardized 3-page form from a lender estimating loan terms and closing costs.
Loan Estimate Comparison: Reviewing multiple lender estimates side-by-side to choose the best terms.
Loan Limit: The maximum loan amount a lender or program will fund — varies by area and loan type.
Loan Modification: A permanent change to mortgage terms (rate, term, principal) to help a struggling borrower.
Loan Officer (LO): The licensed professional who guides borrowers through the mortgage application process.
Loan Servicing: The administration of a mortgage after origination — collecting payments, handling escrow, and reporting.
Loan Status Update (LSU): An AAR form used in Arizona to update the seller on the buyer's loan progress.
Loan Term: The length of time over which a mortgage is repaid, commonly 15, 20, or 30 years.
Loan-to-ARV (LTARV): Loan amount as a percentage of after-repair value, common in rehab loans.
Loan-to-Cost (LTC): Loan amount as a percentage of total project cost, used in fix-and-flip and construction lending.
Loan-to-Value (LTV): The loan amount expressed as a percentage of the property's appraised value.
Lock Extension: Pushing the rate-lock expiration further out, typically for a fee.
Lock Float: Choosing not to lock a rate immediately, hoping rates improve before closing.
Lockbox: A secure device holding a property key, accessible only to authorized agents.
Loft: An open-floor-plan residential conversion, often from former industrial spaces.
Loss Mitigation: Lender programs aimed at avoiding foreclosure through modification, forbearance, or short sale.
Loss Run: An insurance carrier report showing a property's claims history.
Loss to Lease: The difference between market rent and actual rent — a measure of upside.
Loss-of-Rent Insurance: Coverage replacing rental income when a property is uninhabitable due to a covered loss.
Lump-Sum Contract: A construction contract with a fixed price for a defined scope.

M

Maintenance Reserve: Funds set aside for routine repairs and unexpected expenses.
Make-Ready: The process of preparing a vacant unit for the next tenant.
Management Fee: The percentage of monthly rent a property manager charges, typically 6-12%.
Managing Broker: The licensed broker responsible for supervising an office and its agents.
Manual Underwriting: Human review of a loan file, often used for complex or non-standard situations.
Manufactured Home: A factory-built home that meets federal HUD code, transported to a site after construction.
Manufactured Home Community: A planned development of manufactured homes, often with rented lots.
Marina: Real estate specializing in boat slips and waterfront amenities.
Mark-to-Market Rents: Adjusting current rents to current market levels at lease turnover.
Marketability: The ease with which a property can be sold at fair value in the current market.
Marketable Title: Title free of significant defects that a reasonable buyer would accept.
Marketing Fund Contribution: Tenant contributions to a center's joint marketing efforts, often in retail.
Master Servicer: The party responsible for the day-to-day administration of loans in a securitized pool.
Material Fact: Information important enough to influence a buyer's decision — must be disclosed.
Material Participation: Active involvement in a real estate activity meeting specific IRS hour and engagement tests.
Matterport: A 3D scanning platform creating walkable virtual tours of properties.
Maturity Default: Defaulting because a loan reaches its end date and isn't paid off.
MBS: Mortgage-Backed Security — a bond backed by a pool of mortgages.
MCC: Merchant Category Code — a 4-digit code identifying a merchant's industry, used for fees and rewards.
Mechanic's Lien: A claim against property by contractors or suppliers for unpaid work.
Mechanic's Lien (Arizona): A.R.S. § 33-981 et seq. — contractors and suppliers can lien property for unpaid work in Arizona.
Medical Office Building (MOB): Office property designed for medical or healthcare tenants.
Mediterranean Style: A home style with tile roofs, stucco walls, and arched openings.
Megan's Law: Statutes requiring disclosure of registered sex offenders in a neighborhood.
Mello-Roos (Not Arizona): A California-only special district financing — not used in Arizona but sometimes confused with CFDs.
Memory Care: Specialized senior facilities serving residents with Alzheimer's or dementia.
Merchant Account: A business bank account that accepts credit and debit card payments.
Merchant Cash Advance (MCA): A lump sum advance repaid via a percentage of future credit card sales.
Merchant of Record (MoR): The entity legally responsible for a transaction with the cardholder.
Metes and Bounds: A method of describing land by its boundary lines, distances, and physical features.
Mezzanine Loan: A hybrid debt-equity loan that is subordinate to senior debt and often convertible to equity on default.
Mezzanine Stack: The mid-layer of capital between senior debt and equity in a deal.
Microloan: A small loan (typically under $50K) for startups and small businesses, often via nonprofit lenders.
Mid-Rise: A multistory building between 4 and 9 stories.
Mid-Term Furnished Rental: 30-90 day furnished rentals targeting traveling professionals and insurance placements.
Mid-Term Rental (MTR): Rentals of 30+ days, popular with traveling professionals and relocating families.
Mill Rate: The amount of tax per $1,000 of assessed property value.
Mineral Deed: A deed transferring only mineral rights, separate from surface ownership.
Mineral Rights: The legal right to extract minerals from beneath a parcel of land, sometimes sold separately from the surface.
Mini-Perm Loan: A medium-term loan (3-5 years) bridging construction completion to permanent financing.
MIP: Mortgage Insurance Premium — required on FHA loans, often for the life of the loan.
Mixed-Income Development: A property combining market-rate units with subsidized affordable units.
Mixed-Use Property: Real estate containing both residential and commercial spaces.
Mixed-Use Property (1031): Property used partly as a residence and partly for investment — requires special apportionment.
MLS: Multiple Listing Service — a database of property listings shared among real estate professionals.
Mobile Home: A factory-built dwelling built before HUD code (1976), often classified as personal property.
Mobile Home Park (MHP): A community of manufactured homes on rented or owned lots.
Mobile Notary: A notary who travels to the signer's location, common for remote real estate closings.
Modified Gross Lease: A hybrid lease where landlord and tenant split certain operating expenses.
Modified IRR (MIRR): An IRR variant assuming a more realistic reinvestment rate for interim cash flows.
Modular Home: A home built in sections at a factory then assembled on a permanent foundation on-site.
Mold Disclosure: A disclosure of known mold issues in a property, required in many states.
Monument: A fixed physical object (stake, marker, natural feature) defining a property boundary.
Mortgage: A loan used to finance the purchase of real estate, secured by the property itself.
Mortgage Banker: A direct lender that originates and funds its own loans.
Mortgage Boot: Debt relief in a 1031 exchange that may trigger taxable gain.
Mortgage Broker: An intermediary who shops multiple lenders to find a borrower the best loan.
Mortgage Credit Certificate (MCC): A federal tax credit for qualifying low/moderate income homebuyers on a portion of mortgage interest paid.
Mortgage Interest Deduction: A federal tax deduction for interest paid on home loans up to specified limits.
Mortgage Recording Tax: A state tax on new mortgages, common in NY and a few other states.
Mortgage REIT (mREIT): A REIT that invests in mortgages and mortgage-backed securities.
Mortgagee: The lender holding the mortgage on a property.
Mortgagee in Possession: A lender that takes physical control of a property before formal foreclosure.
Mortgagor: The borrower who pledges property as collateral under a mortgage.
Move-In/Move-Out Inspection: A documented walkthrough that records property condition at the start and end of tenancy.
Multifamily (5+): Residential property with five or more units, classified as commercial for lending purposes.

N

Named Peril Policy: Insurance covering only specific risks listed in the policy.
Naturally Occurring Affordable Housing (NOAH): Older market-rate housing that's affordable without subsidies.
NAV Premium/Discount: The gap between a REIT's stock price and its underlying NAV.
Negative Amortization: When loan payments don't cover interest, causing the balance to grow over time.
Neighborhood Center: A retail center anchored by a grocery store serving daily needs of nearby residents.
Net Asset Value (NAV): A REIT's underlying property value minus debt — used to compare to its stock price.
Net Effective Rent (NER): Average rent over the lease term after deducting concessions and free rent.
Net Lease: A lease where the tenant pays some operating expenses in addition to base rent.
Net Lease (STNL): Single-tenant net lease — typically long-term leases with credit tenants and minimal landlord duties.
Net Listing: A listing where the broker keeps anything above an agreed seller's net — often illegal or restricted.
Net Operating Income (NOI): Gross income minus operating expenses, excluding debt service and capital expenditures.
Net Present Value (NPV): The present value of future cash flows minus the initial investment.
Net Profit Margin: Net income as a percentage of revenue.
Net Worth Statement: A summary of a borrower's total assets minus total liabilities.
Net Yield: Income after expenses divided by purchase price, expressed as a percentage.
Network Fee: Fees charged by Visa, Mastercard, Amex, or Discover for using their networks.
Non-Judicial Foreclosure: A foreclosure done outside court using a power-of-sale clause in the trust deed.
Non-Liquid Assets: Assets not easily converted, like retirement accounts (counted at discount) and real estate.
Non-QM Loan: A mortgage that doesn't meet the qualified-mortgage standards — often for self-employed borrowers.
Non-Recourse Loan: A loan where the lender's only remedy is the collateral, not the borrower personally.
Notary Public: An official authorized to witness signatures on legal documents.
Note Investing: Buying mortgage notes from banks or investors for the income stream.
Notice of Default (NOD): A public filing notifying a borrower of loan default and starting the foreclosure clock.
Notice of Trustee Sale (AZ): The recorded notice that begins Arizona's 90-day non-judicial foreclosure timeline.
Notice to Vacate: A formal notice from a tenant or landlord ending the rental agreement.

O

Occupancy Type: Classification of a borrower's intent: owner-occupied, second home, or investment.
Office Building: A commercial property used primarily for professional workspaces, classified by Class A, B, or C.
Open House: A scheduled time when a listed property is open for unscheduled buyer visits.
Open Listing: A non-exclusive listing where any agent who finds a buyer earns commission.
Open-End Fund: A fund that continuously accepts new investors and allows periodic redemptions.
Operating Expense Pass-Through: Operating costs (taxes, insurance, CAM) charged back to tenants under net leases.
Operating Expense Ratio (OER): Operating expenses divided by gross income, expressed as a percentage.
Operating Expense Stop: A cap on the landlord's operating expenses, with the tenant paying any excess.
Operating Lease: A lease treated as a rental expense, off-balance-sheet under old standards.
Operating Margin: Operating income divided by revenue, showing core business profitability.
Operating Statement: A monthly or annual report showing a property's income, expenses, and net cash flow.
OPEX Cap: A lease provision limiting how much operating expenses can rise year-over-year for the tenant.
Opportunistic Investment: High-risk strategies like ground-up development or major repositioning targeting high returns.
Opportunity Zone: An economically distressed area where investors can defer or reduce capital gains taxes.
Option Period: A negotiated window allowing the buyer to back out without losing earnest money.
Origination Fee: A fee charged by a lender for processing a new loan application.
Outdoor Storage: Yards for vehicles, equipment, or materials — increasingly investable industrial subclass.
Owner Financing: Seller acts as the lender, providing financing to the buyer.
Owner Statement: A monthly report from a property manager to the owner showing income, expenses, and cash flow.
Owner's Representative: A consultant managing a construction project on behalf of the property owner.
Owner-Occupied Requirement: SBA real estate loans require business owners to occupy at least 51% of the space.

P

Pace of Investment: How quickly an investor deploys capital across deals — a key portfolio-construction decision.
Paired Sales Analysis: Comparing two similar sales to isolate the value of a single feature.
Pari Passu: Latin for "on equal footing" — investors share in distributions proportionately.
Pari Passu Bonds: Tranches within a securitization that share losses pro rata.
Party Wall: A shared wall between two adjoining properties, jointly maintained.
Pass-Through Expenses: Operating costs the landlord bills back to tenants under net or modified-gross leases.
Passive Activity Loss: Tax losses from real estate that generally can only offset passive income, with exceptions.
Patent Defect: An obvious property defect plainly visible on inspection.
Patio Home: A small single-family home, often in a 55+ community, with minimal yard maintenance.
Payback Period: The time required to recover the initial investment from cash flows.
Payment Bond: A surety bond guaranteeing the contractor pays subcontractors and suppliers.
Payment Gateway: Software that securely transmits card data from a customer to a payment processor.
Payout Ratio: Percentage of FFO or AFFO a REIT distributes as dividends.
PCI Compliance: Following the Payment Card Industry Data Security Standards to protect card data.
PCI DSS: Payment Card Industry Data Security Standard — the security framework for cardholder data.
Penthouse: An upscale residence on the top floor of a multi-story building.
Per Diem Interest: Prepaid interest from the closing date through the end of the month.
Percentage Lease: A retail lease where the tenant pays base rent plus a percentage of sales.
Performance Bond: A surety bond guaranteeing the contractor finishes the project as agreed.
Personal Guarantee: A business owner's pledge of personal assets to back a business loan.
Personal Guarantor: An individual pledging personal assets to secure a business line of credit.
Personal Property: Movable items not permanently attached to real estate, such as furniture or appliances not built in.
Personal Residence Exclusion: The Section 121 exclusion of up to $250K/$500K gain on a primary home sale.
Pet Rent: Monthly fee charged for residents with pets, in addition to a pet deposit.
Physical Depreciation: Wear and tear on a property over time.
Physical Vacancy: The percentage of units actually unoccupied at a point in time.
Piggyback Loan: A second loan taken simultaneously with a first mortgage to avoid PMI or jumbo limits (e.g., 80/10/10).
PIK Interest: Payment-In-Kind — interest added to the loan balance rather than paid in cash.
Planned Community Act (AZ): A.R.S. Title 33 Chapter 16 — governs Arizona planned communities and their HOAs.
Plat: A map drawn to scale showing the divisions of a piece of land into lots, with streets and easements.
PMI: Private Mortgage Insurance — required on conventional loans with less than 20% down.
Pocket Listing: A property marketed privately within a brokerage rather than placed in the MLS.
Point of Sale (POS): The hardware and software used to accept customer payments at the time of sale.
Points: Upfront fees paid to the lender at closing; 1 point equals 1% of the loan amount, often used to buy down the rate.
Points and Interest: The two main costs of a hard money loan — upfront points plus monthly interest.
Police Power: The government's right to regulate land use through zoning, building codes, and health rules.
Pooling and Servicing Agreement (PSA): The contract governing a securitized mortgage pool and its participants.
Portfolio Lender Strategy: Working with a single lender that keeps loans in-house for flexibility.
Portfolio Loan: A mortgage a lender keeps on its own books rather than selling to investors.
Possession at Funding: Buyer takes possession when the loan funds — typical same-day closings.
Possession at Recording: Buyer takes possession when the deed records — common in some western states.
Possession Date: The date when the buyer takes physical possession of the property — sometimes different from closing.
Post-Money Valuation: A company's value immediately after a new investment round closes.
Power Center: A retail center anchored by multiple big-box stores.
Power of Attorney: A legal document authorizing one person to act on another's behalf in property matters.
Power of Attorney (Closing): A document allowing another to sign closing paperwork on behalf of an absent party.
Power of Sale: A clause in trust deeds allowing non-judicial foreclosure without court involvement.
Pre-Approval: A lender's conditional commitment to lend a specific amount based on verified credit and finances.
Pre-Authorization: A temporary hold on funds before a final transaction amount is known.
Pre-Development: The phase of a project covering planning, design, entitlements, and financing setup.
Pre-Foreclosure: The period between default and foreclosure sale, when the owner may still sell or cure.
Pre-Money Valuation: A company's value before a new investment round closes.
Pre-Qualification: An informal estimate of how much a buyer might borrow, based on stated income.
Pre-Underwriting: Early review of a loan file before the property is identified.
Predictive Analytics: Models forecasting market trends, property values, or tenant behavior.
Preferred Equity: An equity position with priority returns over common equity but below debt in the capital stack.
Preferred Equity Catch-Up: A provision allowing preferred investors to receive a larger share of distributions until a threshold is met.
Preferred Lender Program (PLP): An SBA designation allowing approved lenders to make 7(a) decisions in-house.
Preferred Return: A minimum annual return investors receive before the sponsor shares in profits.
Prepayment Clause: A loan provision dictating any fees for paying off a private loan early.
Prepayment Penalty: A fee charged for paying off a loan early — common in some commercial and subprime loans.
Price Per Square Foot: Property price divided by total square footage — a common comparison metric.
Principal: The original loan amount, excluding interest and fees.
Private Money Loan: A loan from an individual or non-institutional lender, often friends, family, or investors.
Private REIT: A REIT not registered with the SEC and limited to accredited investors.
Pro Forma: A projection of a property's future income, expenses, and cash flows.
Pro Forma Income Statement: A projected operating statement showing expected revenue and expenses post-construction.
Pro Forma Rent: Projected market rent used to underwrite a multifamily acquisition.
Pro Forma Variance: Difference between projected and actual operating metrics in multifamily.
Processor: The mortgage team member who assembles and verifies the loan file before underwriting.
Procuring Cause: The agent whose efforts directly led to a buyer's purchase — entitled to commission.
Profit a Prendre: The right to enter another's land and take resources such as timber, minerals, or game.
Project-Based Voucher: A Section 8 voucher attached to a specific unit rather than to a household.
Promissory Note: A signed document containing the borrower's written promise to repay a loan.
Promote: The disproportionate share of profits paid to the sponsor above a preferred return.
Property Manager: A professional or company responsible for the day-to-day operation of rental property.
Property Tax: An annual tax levied by local governments based on assessed property value.
PropTech: Technology serving the real estate industry, from listings platforms to building automation.
Proration: The division of property taxes, HOA dues, or rents between buyer and seller at closing.
Public Non-Traded REIT: A REIT registered with the SEC but not listed on a public exchange.
PUD: Planned Unit Development — a community of homes with shared common areas governed by an HOA.
Pueblo Style: Southwestern architectural style mimicking adobe construction with flat roofs and earth tones.
Punch List: A final list of small items to be completed or corrected before closeout.
Punch List Walk: A pre-closing inspection identifying remaining items to be completed.
Purchase and Sale Agreement (PSA): The binding contract between buyer and seller of real estate.
Purchase Order Financing: A loan against a confirmed purchase order to fund inventory or fulfillment.

Q

Qualified Intermediary (QI): A neutral party who holds 1031 exchange proceeds between sale and reinvestment.
Quick Ratio: Liquid assets (excluding inventory) divided by current liabilities.
Quiet Enjoyment: A tenant's right to occupy a property without interference from the landlord.
Quiet Title Action: A lawsuit to resolve disputes or clear defects in a property's title.
Quitclaim Deed: A deed that transfers whatever interest the grantor has without any warranty of title.

R

Radon Disclosure: A disclosure or test for radon gas, a naturally occurring radioactive hazard.
Ranch Style: A single-story house with a long, low profile and open layout — common in the Southwest.
Rate Lock: A lender's commitment to hold a specific interest rate for a set period during the loan process.
Re-leveraging: Adding new debt to a REIT's balance sheet after deleveraging.
Re-REMIC: A re-securitization of mortgage-backed securities into new tranches.
Real Estate Note Sale: Selling an existing mortgage note to another investor for immediate cash.
Real Estate Professional Status (REPS): An IRS designation allowing real-estate losses to offset active income, requiring 750 hours and material participation.
Real Property: Land and anything permanently attached to it, including buildings, fixtures, and rights to natural resources.
Real vs. Nominal Return: Real return is inflation-adjusted; nominal is the stated return.
REALTOR®: A real estate licensee who is a member of the National Association of REALTORS®.
Recasting: Re-amortizing a mortgage after a large principal payment, lowering monthly payments.
Receiver: A court-appointed neutral party who manages a distressed property during litigation.
Reconciliation: The appraiser's process of weighing multiple value indications to reach a final opinion.
Reconciliation (MCA): The process of adjusting MCA payments downward when sales slow.
Recording: The act of filing real estate documents with a local government office to give public notice.
Recording Fee: The fee paid to a county recorder to file deeds and mortgages.
Recourse Carveouts: Specific carve-outs in non-recourse loans triggering personal liability.
Recourse Loan: A loan where the borrower is personally liable beyond the collateral.
Recurring Billing: Automatically charging a customer on a regular schedule.
Redemption Period: A statutory window after foreclosure when the borrower may reclaim the property by paying the debt.
Referral Fee: Commission paid to another agent for referring a client.
Refi Cashout Strategy: Pulling tax-free equity from a refinance to fund additional acquisitions.
Refi Event: A property refinance returning capital to investors during the hold period.
Refinance: Replacing an existing mortgage with a new one, usually for better terms.
Refund: Returning funds to a customer through the original payment method.
Reg D 506(b): An SEC exemption allowing private offerings to accredited and limited non-accredited investors without general solicitation.
Reg D 506(c): An SEC exemption permitting general solicitation, but limited to accredited investors only.
Regional Mall: A large enclosed shopping center anchored by department stores, drawing from a wide area.
Reinstatement: Curing a default by paying past-due amounts plus fees to stop foreclosure.
REIT: Real Estate Investment Trust — a company that owns or finances real estate and trades like a stock.
REIT Status: IRS tax-advantaged designation requiring 90% distribution of taxable income and at least 75% real estate assets.
Remainder Interest: A future ownership interest that takes effect after a life estate ends.
Renewal Funding: Additional financing offered after partial repayment of a previous advance.
Renewal Option: A tenant's right to extend the lease at predetermined terms.
Renovation Premium: The rent uplift achievable on a unit after renovating to market standards.
Rent Collection: Receiving and recording rent payments, often through online portals.
Rent Concession: A discount or free-rent period offered to attract tenants in soft markets.
Rent Roll: A document listing each unit, tenant, lease term, and current rent for a property.
Rent-Back: An arrangement where the seller leases the property from the buyer after closing.
Rentable vs. Usable Square Feet: Rentable includes a share of common areas; usable is only the tenant's space.
REO Property: Real Estate Owned — property the lender took back after an unsuccessful foreclosure auction.
Repayment Period: The phase after the draw period when the borrower must pay down the outstanding balance.
Replacement Cost: The amount it would take to rebuild a structure with similar materials at current prices.
Reserve Account: Funds a processor holds back to cover potential chargebacks or losses.
Reserve Requirement: Minimum months of PITI a borrower must have available after closing, often 2-6 months.
Reserves: Liquid assets a borrower holds after closing, often expressed as months of PITI.
Resident Retention: The rate at which existing tenants renew leases — a key operational metric.
Residual Income: Income left after housing and debts — a key VA loan underwriting metric.
Restricted Appraisal Report: A short-form appraisal for a single client with limited use.
Restrictive Covenant: A private deed restriction limiting how a property may be used.
Retail Property: Commercial space leased for sale of goods or services to consumers.
Retainage: A portion of contractor payments withheld until project completion to ensure performance.
Revenue Recognition: Accounting principles for when and how revenue is recorded.
Revenue-Based Financing: Funding repaid as a percentage of monthly revenue until a multiple is reached.
Reverse 1031 Exchange: A 1031 where the replacement property is acquired before the relinquished property is sold.
Reverse Mortgage: A loan for homeowners 62+ that converts home equity into cash without monthly payments.
Reversion: The return of property to the grantor or their heirs after a temporary interest ends.
Revolving Credit: Credit that can be reused as it's repaid, like a credit card or LOC.
RFP: Request for Proposal — invites contractors or design firms to bid on a project.
RFQ: Request for Qualifications — solicits qualifications before formal proposals.
Rider: Another term for endorsement — a written attachment changing policy terms.
Right of First Offer (ROFO): A right requiring the owner to offer space to a party before listing it publicly.
Right of First Refusal (ROFR): A right giving a party first chance to buy or lease before the owner offers to others.
Right of Redemption: The borrower's statutory ability to redeem the property after foreclosure by paying the debt.
Right of Way: A type of easement giving the right to pass over another's property.
Right to Audit: A tenant's contractual right to inspect landlord's records for pass-through expenses.
Riparian Rights: Rights of landowners whose property borders a body of water to access and use that water.
Risk Holdback: A processor's reserve withheld from settlements to cover potential chargebacks.
Risk Premium: Extra return above the risk-free rate to compensate for additional risk.
Risk-Free Rate: The theoretical return on a no-risk investment, typically the 10-year Treasury yield.
RMBS: Residential Mortgage-Backed Security — a bond backed by residential mortgages.
RON: Remote Online Notarization — notarial acts performed via secure video, legal in many states.
RUBS: Ratio Utility Billing System — allocating utility costs to tenants based on a formula.
Runway: The number of months a business can operate at its current burn rate before running out of cash.
RV Park: Real estate providing serviced lots for recreational vehicles, often with amenities.
RVPI: Residual Value to Paid-In — remaining unrealized value over invested capital.

S

Safe Harbor (1031): IRS-approved procedures that exchanges must follow to qualify for tax deferral.
Sale-Leaseback: A transaction where the owner sells a property and leases it back from the buyer.
Sales Comparison Approach: A valuation method based on prices of similar properties recently sold.
Same-Store NOI: NOI growth on properties owned for at least a year — a key REIT performance metric.
SBA 504 Loan: An SBA program for fixed-asset purchases like real estate or major equipment.
SBA 7(a) Loan: The SBA's most common loan program, used for working capital, equipment, or real estate.
SBA CDC: A Certified Development Company — a nonprofit that originates SBA 504 loans alongside a bank.
SBA Disaster Loan: Low-interest loans for businesses impacted by declared disasters.
SBA Express Loan: A streamlined 7(a) loan with 36-hour SBA decision and lower max loan amount.
SBA Guaranty Fee: A fee paid to the SBA based on the guaranteed portion of a loan.
SBA Loan: A small-business loan partially guaranteed by the U.S. Small Business Administration.
SBA Loan Limit: The maximum amount a single business can borrow — currently $5M for 7(a) loans.
SBA Use of Proceeds: Allowed loan purposes including working capital, equipment, real estate, and refinancing.
Schedule E: An IRS form reporting rental and royalty income — key for landlord borrowers.
Schematic Design (SD): Early-stage architectural drawings showing the basic concept of a project.
Seasoning: How long funds have sat in an account, used to verify down-payment sources.
Second Mortgage: Any mortgage subordinate to the first mortgage, paid only after the first in default.
Section 121 Exclusion: The IRS rule allowing up to $250K ($500K married) of gain to be excluded on a primary residence sale.
Section 179 Deduction: A tax provision allowing immediate expensing of certain business property purchases up to a limit.
Section 8: A federal housing-choice voucher program that subsidizes rent for low-income tenants.
Secured Line of Credit: A line of credit backed by collateral such as real estate or inventory.
Security Deposit: Funds held by a landlord to cover damages or unpaid rent at lease end.
Self-Employed Borrower: A borrower whose income comes from a business they own — typically underwritten with tax returns.
Self-Storage Facility: A property containing rentable storage units for personal or business use.
Seller Carryback: Seller financing where the seller takes back a mortgage from the buyer.
Seller Credit: Money the seller agrees to pay toward the buyer's closing costs.
Senior Debt: The first lien on a property — highest priority for repayment in default.
Senior Housing: Properties serving older adults, ranging from independent living to skilled nursing.
Senior Tranche: The highest-priority debt slice in a structured deal, repaid first.
Sensitivity Analysis: Modeling how changes in key assumptions affect investment outcomes.
Servicer: The company that collects payments and manages a mortgage on behalf of the loan owner.
Servicing Strip: The fee paid to the servicer carved out of the loan's interest rate.
Setback: The minimum distance a building must be from a property line, street, or other feature.
Settlement: The transfer of funds from the cardholder's bank to the merchant's bank after a transaction.
Settlement Agent: The neutral party (attorney, escrow officer, title agent) coordinating closing.
Settlement Date: The date funds and title transfer at closing.
Settlement Statement: An itemized summary of charges and credits for buyer and seller at closing.
Severalty: Ownership of property by one person or entity alone.
Severance: Detaching something from real property so it becomes personal property (e.g., harvesting trees).
Sharpe Ratio: A measure of risk-adjusted return — excess return divided by volatility.
Sheriff's Deed: A deed issued after a court-ordered sale, often following foreclosure.
Short Sale: A sale where the lender agrees to accept less than the loan balance to release the lien.
Short-Term Business Loan: A loan typically repaid within 3-18 months for immediate working capital needs.
Short-Term Rental (STR): Renting a property on a nightly or weekly basis, often through platforms like Airbnb.
Short-Term Rental Loophole: Using avg-stay-under-7-days rentals to claim active-style losses without REPS, with material participation.
Showing: A scheduled appointment to view a property with a real estate professional.
Side Letter: A private agreement between a fund and individual investors granting special terms.
Single-Family Rental (SFR) Portfolio: A collection of single-family homes operated as institutional rentals.
Single-Family Residence (SFR): A standalone dwelling designed for one household.
Sinkhole Insurance: Coverage for damage from collapsed land, common in Florida.
Site Plan: A scaled drawing showing how buildings, parking, and landscaping will be arranged on a parcel.
Skilled Nursing Facility (SNF): Licensed residential care providing 24-hour medical and personal services.
Smart Building Sensors: IoT devices monitoring occupancy, temperature, and energy use in real time.
Smart Home: A home with connected devices for lighting, security, climate, and appliances.
Smart Lock: An electronic lock controllable via phone or keypad, common in short-term rentals.
SNDA: Subordination, Non-Disturbance, and Attornment Agreement — protects tenant rights if a lender takes over.
Sober Living Rental: Single-family homes operated as sober-living recovery housing with structured occupancy.
Soft Costs: Indirect development expenses such as design, permits, legal fees, and financing costs.
Soft Money Loan: An asset-backed loan with terms between conventional and hard money.
Soft Pref: A cumulative preferred return that accrues unpaid amounts.
Soft Pull: A credit check that doesn't affect the score, often used for pre-qualifications.
Sole and Separate Property: An AZ vesting for property owned individually, often acquired before marriage or by gift.
SPDS: Seller's Property Disclosure Statement — an AZ form where the seller discloses known material facts about the property.
Special Dividend: An extraordinary one-time dividend, often from a property sale.
Special Servicer: A CMBS servicer handling defaulted or troubled loans.
Special Warranty Deed: A deed warranting only against title defects arising during the seller's ownership.
Specific Performance: A court remedy forcing a party to complete a contract rather than paying damages.
Specifications (Specs): Detailed written descriptions of materials and quality standards in a project.
Sponsor: The operating partner who finds, acquires, and manages a real estate investment.
Sponsor Co-Invest: Capital the sponsor invests alongside LPs to align interests.
Sponsor Equity: The cash the borrower (sponsor) puts into a deal alongside private financing.
Sponsoring Broker: The broker under whom a salesperson's license is held.
Spot Survey: A focused survey verifying specific features rather than full boundaries.
Stabilization: The point when a newly built or repositioned property reaches steady-state occupancy and income.
Stacking: Taking multiple MCAs or short-term loans simultaneously — usually a covenant violation.
Stand-By LOC: A line of credit that guarantees payment to a beneficiary if the principal defaults.
Standard Deviation: A statistical measure of how much returns vary from their average — a common volatility proxy.
Standby Agreement (SBA): A subordination agreement keeping personal loans behind SBA debt.
Stated Income Loan: A loan approved based on the borrower's reported income without full verification.
Statutory Redemption: Redemption rights provided by state law after a foreclosure sale.
Step-Up in Basis: Adjustment of an inherited property's tax basis to its date-of-death fair market value.
Step-Up Rent: A lease with pre-scheduled rent increases at specified intervals.
Stigmatized Property: Property with non-physical issues (death, crime) that may affect its market value.
Stop Notice: A subcontractor's claim against project funds for unpaid work, separate from a lien.
Streamline Refinance: A simplified refinance for FHA or VA loans with reduced documentation.
Stress Test: Underwriting at a higher hypothetical rate to ensure the borrower can still afford payments.
Strict Foreclosure: A type of foreclosure in some states where the property goes directly to the lender without auction.
Strip Center: A small retail center with stores facing a parking lot, typically without anchor tenants.
Student Housing: Purpose-built rental properties serving university students.
Sub-Metering: Individual unit metering for utilities, allowing direct tenant billing.
Subcontractor: A specialty contractor (electrical, plumbing, etc.) hired by the general contractor.
Subdivision: Land divided into multiple lots for sale or development.
Subdivision Public Report: The ADRE-issued report disclosing key facts about a subdivision, given to AZ buyers.
Subjacent Support: A landowner's right to have the land below their surface naturally support it.
Subject Property: The property being appraised.
Subject-To: Buying property while leaving the seller's existing mortgage in place.
Sublease: An arrangement where the original tenant leases part or all of the space to a third party.
Submarket: A geographic sub-area within a larger market, often used in multifamily comparables.
Subordinate Debt: Any debt paid only after senior debt is satisfied in default or sale.
Subordination Agreement: A contract establishing the order of repayment between multiple lenders.
Subordination Level: The percentage of pool losses a senior tranche can absorb before being affected.
Subrogation: An insurer's right to step into the shoes of the insured to recover from a third party.
Subscription Billing: A specialized form of recurring billing for ongoing services with tiered plans.
Substantial Completion: The point at which a project is sufficiently complete to be used for its intended purpose.
Super-Jumbo Loan: A jumbo loan exceeding typical jumbo limits, often $2M+.
Surcharge: An additional fee charged to customers paying with credit cards, where legal.
Surety Bond: A contractor's guarantee of project completion, backed by a third-party insurer.
Surplus Funds: Money left over after a foreclosure sale satisfies the loan, owed to the former owner.
Survey: A precise measurement and mapping of a property's boundaries, structures, and easements.
Suspended Losses: Passive losses carried forward when current rules limit their use.
Syndication: Pooling capital from multiple investors to acquire larger properties together.

T

T-12: Trailing 12 months of property financials — the standard underwriting document.
T-3 Annualized: Three trailing months annualized — useful when a value-add property's recent performance differs from T-12.
Tag-Along Right: A minority owner's right to join a sale initiated by majority owners on the same terms.
Take-Out Loan: Permanent financing that replaces a short-term construction or bridge loan.
Tax Deed: A deed issued by a government after a property is sold for unpaid taxes.
Tax Deed Investing: Purchasing properties at tax-foreclosure auctions where unpaid taxes have led to title transfer.
Tax Lien: A government claim against property for unpaid taxes, which takes priority over most other liens.
Tax Lien Investing: Buying property tax debt for interest and potential title claims.
Tax Loss Harvesting: Selling losing investments to offset capital gains elsewhere.
Taxation Power: The government's authority to levy property taxes — one of the four powers limiting ownership.
Ten-Day Notice (Cure): An AZ notice giving a tenant 10 days to cure a non-rent lease violation.
Tenancy by the Entirety: A form of joint ownership available only to married couples in some states.
Tenancy in Common: Co-ownership where each owner holds an individual, separately transferable share.
Tenant Allowance: Money a landlord provides for tenant build-out, separate from TI.
Tenant Experience Platform: Software helping commercial tenants access amenities, services, and communications.
Tenant Improvement (TI) Allowance: A landlord's contribution toward customizing a leased space for the tenant.
Tenant Portal: An online platform where tenants pay rent, submit maintenance requests, and communicate.
Tenant Screening: Background, credit, and rental history checks performed on prospective tenants.
Tenant-in-Common (TIC) 1031: Replacement property structure where investors hold fractional title together.
Term Loan: A loan with a fixed repayment schedule and term, typically 1-10 years.
Term-Out Provision: Converting an outstanding LOC balance into a term loan with scheduled payments.
Terminal Value: The estimated value of a property at the end of a holding period in a DCF model.
TI Buildout: The construction work to prepare a leased commercial space for tenant occupancy.
Tiered Pricing: Processor pricing with tiers (qualified, mid-qualified, non-qualified) — often opaque.
Time and Materials: Contractor billed for time worked plus materials at cost or markup.
Time Value of Money: The concept that money available today is worth more than the same amount in the future.
Tiny Home: A small dwelling, typically under 400 sq ft, often on a movable chassis or fixed foundation.
Tip Adjustment: Increasing a captured transaction amount to account for a tip.
Title: The legal evidence of ownership of real property.
Title Abstract: A condensed history of all recorded documents affecting a property's title.
Title Commitment: A title company's promise to issue a title insurance policy under specified conditions.
Title Insurance: Insurance protecting buyers and lenders against losses from title defects.
Title Insurance (Owner's Policy): Protects the buyer against losses from defects in title that existed before purchase.
Title Search: An examination of public records to confirm a property's ownership history and outstanding claims.
TODD: Transfer-on-Death Deed — a non-probate deed that takes effect only upon the owner's death.
Tokenization: Representing fractional real estate ownership as digital tokens on a blockchain.
Tokenization (Payments): Replacing sensitive card data with a non-sensitive token for storage and transmission.
Townhouse: A multi-floor home sharing one or two walls with adjacent properties but with its own entrance.
Trade Fixture: Personal property installed by a commercial tenant that remains personal property and can be removed.
Trailing Twelve Operating Expenses (T-12 OpEx): Last 12 months of property expenses, used to underwrite multifamily acquisitions.
Tranche: A slice of a securitized pool with its own risk and return profile.
Transaction Broker: A neutral agent facilitating a deal without representing either party as a fiduciary.
Transfer Tax: A state or local tax on property sales, often a percentage of price.
Tri-Merge Report: A combined credit report pulling data from Equifax, Experian, and TransUnion.
Trifecta Tax Strategy: Combining cost segregation, real-estate professional status, and bonus depreciation for major write-offs.
Triple Net Lease (NNN): A lease where the tenant pays property taxes, insurance, and maintenance on top of rent.
Triple Net Plus Roof: A NNN lease where the tenant is responsible for roof maintenance as well.
Triplex: A residential building with three separate dwelling units.
Trust Account: A separate bank account holding tenant security deposits, regulated by state law.
Trust Beneficiary: A person entitled to receive property held in trust.
Trust Deed: An alternative to a mortgage in some states, transferring title to a trustee until the loan is repaid.
Trustee (Deed of Trust): The neutral party holding title under a trust deed until the loan is repaid.
Trustee (Securitization): The entity holding the securitization pool on behalf of investors.
Trustee Sale: A public auction of foreclosed property conducted by a trustee.
Trustor: The borrower in a trust deed who conveys title to a trustee as security.
Tudor Style: A house style with steep rooflines, prominent chimneys, and half-timbered exterior details.
Turn-Key Buildout: Landlord delivers space fully built out to tenant specifications before move-in.
Turnkey Rental: A fully renovated, tenanted, and managed property purchased for passive income.
Turnover Cost: Total cost of preparing a unit between tenants — cleaning, paint, minor repairs.
TVPI: Total Value to Paid-In capital — distributions plus residual value divided by invested capital.

U

Umbrella Policy: Excess liability coverage above the limits of underlying property or auto policies.
Underwriting: The lender's process of evaluating a borrower and property to determine loan risk.
Underwriting (Merchant): A processor's review of a business before approving payment processing services.
Unit Mix: The blend of unit types (studio, 1BR, 2BR) in a multifamily property.
Unlevered IRR: The IRR of an investment without using debt — useful for comparing assets independent of capital structure.
Unsecured Line of Credit: A line of credit not backed by collateral, typically requiring strong credit.
UPREIT Structure: Umbrella Partnership REIT — lets owners contribute property in exchange for OP units tax-deferred.
URAR: Uniform Residential Appraisal Report — the standard form for single-family appraisals.
USDA Business Loan: Loans backed by the USDA to support business growth in rural areas.
USDA Loan: A loan for rural homebuyers backed by the U.S. Department of Agriculture, often requiring no down payment.
Use Clause: A lease provision specifying what activities the tenant can conduct in the space.
USPAP: Uniform Standards of Professional Appraisal Practice — the appraisal industry's ethics framework.

V

VA Loan: A mortgage guaranteed by the Department of Veterans Affairs, often with zero down payment for veterans.
Vacancy Rate: The percentage of total rentable units that are unoccupied at a given time.
Vacant Property Insurance: Specialty coverage for unoccupied properties, often more expensive.
Value-Add Investment: A property with upside through renovation, repositioning, or operational improvement.
Vertical Construction: The actual building phase of construction — framing through finish work.
Vintage Year: The year a private fund first deployed capital — used to benchmark performance.
Virtual Staging: Software-generated furniture and decor added to listing photos digitally.
Virtual Tour: An interactive online walkthrough of a property using 3D or 360° imagery.
VLI: Very Low Income — households earning 30-50% of AMI.
VOD: Verification of Deposit — confirms account balances with a borrower's bank.
VOE: Verification of Employment — a document confirming a borrower's job status and income.
Void: Cancelling a transaction before it settles, with no funds movement.

W

Walkthrough: The buyer's final inspection of a property, typically within 24-48 hours of closing.
Warehouse Line: A short-term credit facility a mortgage banker uses to fund loans before selling them.
Warm Shell: A leased space with MEP systems installed but no interior finishes.
Warranty Deed: A deed in which the seller guarantees clear title and defends against future claims.
Waterfall: The order in which distributions flow to debt, preferred equity, common equity, and the sponsor.
Weekly Repayment: Short-term loan repayment structure with weekly ACH debits.
Well Share Agreement: A recorded AZ document outlining joint rights and costs for properties sharing a domestic well.
Wet Settlement: Loan funds are disbursed at closing, same day as document signing.
Wholesaling: Contracting to buy a property then assigning the contract to another buyer for a fee.
Windstorm Insurance: Coverage for hurricane and tornado damage, often a separate policy in coastal states.
Wire Transfer: The electronic movement of funds between banks, commonly used to pay closing costs.
Workers' Compensation: Insurance covering medical costs and lost wages for employees injured on the job.
Workforce Housing: Housing affordable to households earning 60-120% of area median income.
Working Capital: Current assets minus current liabilities — a measure of short-term liquidity.
Working Capital Loan: Short-term financing for everyday operating expenses.
Wraparound Mortgage: Seller financing where the new loan wraps around an existing loan, with the seller paying it.

Y

Yield Maintenance: A CMBS prepayment penalty making the lender whole on lost interest.
Yield on Cost: Projected stabilized NOI divided by total project cost, useful for value-add and development deals.
Yield Spread: The difference between an investment's yield and a benchmark like Treasuries.