- ARV (After-Repair Value)
- What a property will realistically sell for once it's fully repaired, based on recent comparable sales — not asking prices. Every flip number starts here.
- Cap Rate
- NOI divided by the property's all-in cost — how the property performs unleveraged. A quick way to compare rentals before financing enters the picture.
- Cash-on-Cash Return
- Your annual cash flow divided by the actual cash you put into the deal. It answers: what is my money earning each year?
- Comparable Sales (Comps)
- Recent sold prices of similar nearby properties, used to set a realistic ARV. Sold prices — not listings — and local, not market-wide averages.
- Contingency
- A buffer added to your rehab budget (typically 10–20%) for the surprises you can't see before closing — especially on tax-deed properties you can't enter before the auction.
- CRIM (Puerto Rico)
- The Centro de Recaudación de Ingresos Municipales — Puerto Rico's municipal property-tax authority. CRIM debt attaches to the parcel, so verify the balance before you buy.
- Discount Factor
- The percentage of ARV you start from so you never pay retail for distressed property. Most small investors work at 60–75% of ARV; the less experience, the deeper the discount.
- DSCR (Debt Service Coverage Ratio)
- NOI divided by annual debt payments. Lenders typically want 1.20 or higher — it shows the rent comfortably covers the mortgage.
- Herencia sin partición (Puerto Rico)
- An inheritance never formally divided — Puerto Rico's #1 title risk. The property may belong to many heirs at once, so buying from one heir doesn't give you the whole thing.
- Holding Costs
- What it costs to own a property while you renovate and sell it — taxes, insurance, utilities, loan interest, upkeep. Every extra month on the market eats margin.
- Kill Flag
- A condition that vetoes a deal outright, no matter how cheap — flood zone, clouded title, occupants, no legal access, environmental liability. A kill flag means a max bid of zero.
- Max Bid
- The highest price you can pay at auction and still hit your target profit after all costs. It's a ceiling, not a target — written before the auction and obeyed when the room heats up.
- NOI (Net Operating Income)
- A rental's income after vacancy and operating expenses, but before the mortgage. NOI is the foundation for cap rate and DSCR.
- Quiet Title
- A court action that clears competing claims and makes a tax-deed title marketable and insurable. It costs time and money — budget for it before you bid.
- Registro de la Propiedad / Karibe (Puerto Rico)
- Puerto Rico's official property registry, searchable online through the Karibe system. What is recorded (inscrito) is what legally counts — a registry study is the deal, not optional diligence.
- Rent Roll
- A snapshot of every unit you own: tenant, rent, lease dates, and occupancy. The landlord's at-a-glance view of portfolio income.
- REO (Real Estate Owned)
- Property a bank took back after foreclosure and now sells from its own inventory. REOs often come with more paperwork already resolved than a raw tax-debt property.
- Schedule E
- The U.S. tax form where rental income and expenses are reported. A clean rent ledger maps straight to it at tax time.
- Stress Test
- Running your deal through a worse case — lower ARV, higher costs, longer hold — before you commit, so you know the floor, not just the dream.
- Tax Deed
- A property sold by a county to recover unpaid property taxes. The buyer gets the deed, but often must clear title (see Quiet Title) before it's fully marketable.
- Tax Lien
- A claim placed on a property for unpaid taxes. In lien states you buy the debt and earn interest; in deed states the property itself is sold. Know which one you're in.