Term
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Definition
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Term
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Definition
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Term
| Loan to Value Ratio (LTV) |
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Definition
| Amount of loan divided by project value |
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Term
| Debt Service - Monthly Payment |
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Definition
| Includes principal and interest; same amount every month |
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Term
| Debt Service - Annual Debt Service |
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Definition
| Monthly mortgage payment x12 |
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Term
| Debt Service - Amortization Period |
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Definition
| Length of repayment period for determining loan payments |
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Term
| Debt Service - Amortization Schedule |
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Definition
| Schedule showing amount of principal, interest and loan balance for each payment period |
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Term
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Definition
| Number of years before mortgage is due |
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Term
| Debt Service - Balloon Payment |
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Definition
| Amount due at end of loan term if loan term is less than amortization period |
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Term
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Definition
| Multiply monthly mortgage payment x12 and then divide by loan |
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Term
| Net Operation Income (NOI) |
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Definition
| Subtract operating expenses from income |
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Term
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Definition
| Divide NOI by cap rate for value |
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Term
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Definition
| Subtract debt service from NOI |
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Term
| Cash-on-cash (Equity Yield) |
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Definition
| Divide cash flow by equity |
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Term
| Debt Service Coverage Ratio |
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Definition
| Divide NOI by annual debt service |
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Term
| Net Proceeds from Sale (Reversion) |
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Definition
| Amount remaining after mortgage pay-off and selling cost |
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Term
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Definition
| A number usually expressed as a percentage that is divided into NOI to get project value |
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Term
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Definition
| Amount due to lander at time of sale |
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Term
| Discounted Cash Flow (DCF) |
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Definition
| The opposite of compounding |
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Term
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Definition
| Defined as the some of the present value of all future cash flows less the initial investment |
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Term
| Internal Rate of Return (IRR) |
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Definition
| Defined as the rate of discount at which the present value of all future cash flow is exactly equal to the initial capital investment. It is also the discount rate at which the NPV equals zero. |
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Term
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Definition
| The cash-on-cash (equity yield) increases when the amount of debt is increased |
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