CRE Glossary

Q: What is NOI?

NOI stands for Net Operating Income. It is rental income minus operating expenses, the most important metric for property value.

Q: What is Cap Rate?

Cap Rate is the capitalization rate, calculated as NOI divided by property value. Lower cap rates indicate more expensive markets.

Q: What is DSCR?

DSCR stands for Debt Service Coverage Ratio, calculated as NOI divided by annual debt service. Banks typically want 1.25x minimum.

Q: What is LTV?

LTV stands for Loan-to-Value, calculated as loan balance divided by property value. Standard maximum is 75%.

Q: What is a 1031 Exchange?

A 1031 Exchange is a tax-deferred swap where you sell one property and buy another to defer capital gains taxes.

Q: What is the BRRRR Strategy?

BRRRR stands for Buy-Rehab-Rent-Refinance-Repeat. It is the core investment strategy loop: buy cheap, fix up, rent out, refi to extract cash, and repeat.

73 real estate terms and game mechanics — from NOI to City Legend

CRE Glossary

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