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Real Estate Financial Modeling Accelerator (Updated October 2024)

Prior to launching the Accelerator program, Michael and I fielded email after email requesting a more structured real estate financial modeling training program on the site. Over the years, we've covered hundreds of real estate modeling…

Paid in arrears

See 'In arrears'.

In arrears

To pay for services after the work has been done.

Lessor

An entity that owns and leases a property to a tenant or lessee.

DSCR

See Debt Service Coverage Ratio

NOI

See Net Operating Income

Sale Leaseback

A transaction in commercial real estate where, upon completion of the sale, the seller immediately leases back the property from the new owner (i.e. buyer). The lease is generally NNN and long-term, and converts the seller/lessee from an owner…

Real Estate Private Equity (REPE)

Real Estate Private Equity, or REPE, is a term used to describe an individual or firm making direct investments in real estate using private capital, rather than public capital. This form of investment in real estate is generally thought of…

General Vacancy and Credit Loss

In real estate underwriting, General Vacancy and Credit Loss is an adjustment to Gross Potential Income (Rental Revenue + Other Income) on the pro forma income statement. It is used to factor in likely vacancy loss due to market conditions and…

Parking Income

In real estate underwriting, Parking Income refers to revenue derived from renting parking spaces at the property. In standard apartment retail, office, and industrial underwriting, Parking Income is generally an Other Income item given that…

Storage Income

In real estate underwriting, Storage Income refers to income derived from renting storage space to tenants. In apartment, office, retail, and industrial underwriting, Storage Income is generally an Other Income item given that the storage space…

Other Income

In real estate underwriting, Other Income refers to any revenue source not otherwise included in other income line items. Other income may include any number of revenue generators, from application fees to amenities fees. In the basic real estate…

Market Rent

The rent a typical tenant would pay for a comparable unit or suite in the same or comparable market. A real estate owner will often compare the average contract rental rate at their property, to the market rent in the area to determine whether…

Recourse

In real estate, recourse is the responsibility of the guarantor(s) of a mortgage loan to repay said loan in the event of borrower default. Similarly, a recourse mortgage loan is a loan in which the mortgage lender is protected against loss by…

War Room

In real estate, the "War Room" is generally a virtual depository of vital investment-related information necessary to perform due diligence on a deal. Practically speaking, the "War Room" is a collection of computer folders, shared with stakeholders…

MSA

See Metropolitan Statistical Area