Today, Gavin and Josh are doing a high level review of the alphabet soup or more ABC's of real estate. These are terms and acronyms you may hear in a real estate transaction. They don't want you to be intimidated when you hear people using these. Rather Gavin & Josh want you to be informed and empowered! Listed below are the abbreviations and what they stand for. Tune in to find out more!

Property Condition Disclosure Statement (PCDS)

Lead Based Paint Disclosure (LBPD)

Earnest Money Deposit (EMD)

Property Inspection Notice and Addendum (PINA)

For Sale By Owner (FSBO)

For Rent By Owner (FRBO)

Comparative Market Analysis (CMA)

Comercial Real Estate (CRE)

Homeowner's Association (HOA)

U.S. Department of Housing & Urban Development (HUD)

Multiple Listing Service (MLS)

Single Family Home (SFH)

Multi-Family Home (MFH)

Net Operating Income (NOI)

Gross operating income − operating expenses = NOI

Return On Investment (ROI)

ROI= (Net Return on Investment / Cost of Investment) x 100

Cash On Cash Return (CoC)

Cash-on-Cash Return = Annual Before-Tax Cash Flow ÷ Total Cash invested

Capital Expenditure (CapEx)

The cost to acquire, maintain, or improve a piece of property. This can be used in determining if a project is worth the undertaking.

CapEx=ΔPP&E+Current Depreciation

Free Cash Flow (FCF)

Fair Market Value (FMV)

Gross Rent Multiplier (GRM)

Gross Rent Multiplier = Fair Market Value ∕ Gross Rental Income

Internal Rate of Return (IRR)

The internal rate of return (IRR) is a metric used in financial analysis to estimate the profitability of potential investments. IRR is a discount rate that makes the net present value (NPV) of all cash flows equal to zero in a discounted cash flow analysis.

Line of Credit (LOC)

Home Equity Line of Credit (HELOC)

Real Estate Investment Trust (REIT)

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