📘 Glossary
| Name | Definition |
|---|---|
| Return on Equity (ROE) | Owner distributions/ (property value - mortgage balance) |
| Net Operating Income (NOI) | Rental income - expenses |
| Cash on Cash Return (COC) | Cash flow/ money put into project |
| Capitalization Rate (Cap Rate) | NOI/sales price |
| Cashflow | NOI - mortgage payments |
| Private Placement Memorandum | A legal document provided to prospective investors when selling stock or another security in a business |
| Debt Service Coverage Ratio (DSCR) |
|
| Principle, Interest, Tax, Insurance (PITI) | General expenses used in calculations such as qualification for mortgages and NOI |
| Primary Mortgage Insurance (PMI) | Mortgage insurance that protects the lender if borrow stop making payments on your loan. Generally if borrow pays less than 20% for the down payment, they are required to pay the PMI |