Commercial Real Estate Investors Should Know jargon

Commercial Real Estate Investment is a new area for many real estate investors. Below is an alphabetical list of terms used in this field.

Anchored tenants: large national brand tenants such as Albertsons, Longs Drug, Walmart, who bring a lot of traffic in the middle of the shopping cart.

CAM: Maintenance Area. Common fees associated with CAM CAM. NNN leases to refer to the term CAM taxes, tenants pay rent money to cover propertyTaxes, insurance and maintenance.

Cap Rate: The return of investment in the first year after purchase. Capitalization rate is the ratio of 1 Years operating income for the purchase price. The higher the cap, the higher the rental income. For people who invest in the stock market, the maximum rate is the reciprocal of P E.

Cash On Cash: APR return of your deposit without detection. First year cash flow from your original down dividedPayment.

Conduit loan: as Commercial Mortgage Backed Securities (CMBS) loans, often at lower cost than traditional commercial loans, but in a high prepayment penalty (the so-called sale of a penalty or yield maintenance) or no flexibility in payment.

CPD: car per day or volume of traffic on a road.

CPI. Consumer Price Index is often used to compensate for inflation to calculate the annual rent increase.

Due DiligencePeriod: the period after the decline of 15-30 days in order to investigate the property buyer. The buyer may cancel the contract at that time and for any reason and receive a full refund of the deposit.

estoppel certificate: a letter signed by the lessee provided and confirms the terms and conditions of the current lease.

Full-service leasing: leasing, in which tenants pay rent, utilities, includes all-inclusive.

Gross Income: annual income firstCosts.

Gross lease: the tenant lease to pay rent. The owner pays, insurance fees and maintenance.

Total: Gross Lease able area or gross lettable area. This is the space that can be hired and receive rental income. Not included are facilities for services, elevator, etc.

GRM: Gross Rent Multiplier for apartment. Ratio between purchase price and annual income.

LLC: limited liability company. A legal person established in many investors toown commercial real estate.

LOI: Letter of Intent / Interest or binding for your letter does not normally at the property, a bid for a commercial.

May verifier: Member Appraisal Institute accountants.

Master Lease: Lease signed by the seller to rent space to ensure clear offer for rent.

Mixed Use: retail commercial real estate with the first floor and apartments upstairs.

Triple Net (NNN) Lease: Lease intenants to pay the basic fee plus tax on rental property, insurance and CAM. Absolute NNN NNN lease rental agreement that tenants also pay for property management.

NOI: net operating income. annual income, after all costs (taxes, ins., & Maintenance) other than the payment of the loan.

Hall: Stand-alone building in a strategic position in a large shopping center.

Pass Through: see refund.

Percentage lease: Leasing, in which tenant pays rent based moreShare of income of the tenant.

Phase I Report on the inspection report is an assessment that the contamination of the soil / environment. It is usually required by the lender as part of the process of loan approval for a commercial property.

Phase II Report: Inspection report for background investigation of soil and groundwater. This control is more complete, including testing to see if there is a pollution of soil and water.

Pro-forma net income: potential, iehigher income when the property is 100% leased.

Proforma Cap Rate: maximum potential rate of adoption is 100% leased property for rent to the market.

Repayment: The amount of the fee for insurance and property taxes CAM, the tenant must pay a basic fee, the owner of the next.

Guaranteed rent: rooms for rent paid by the seller to the buyer for the vacant until it rented.

SBA loans: the government guaranteed loans for home ownership.

SNDA:Subordination, non-interference Attornment. This is an agreement pursuant to the agreement signed by the tenants banks: the lender of a new bond in the position, as landlord in the case of exclusion, tenant rent as valid as long as it is not in default.

TIC: Tenants in common. One way for small / self-directed IRA investors own a share of ownership of high quality as tenants in common.

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