Investor Reference
REAL ESTATE INVESTOR GLOSSARY
20+ plain-English definitions every wholesale real estate investor should know — from ARV and MAO to BRRRR, DSCR, and cap rate. Bookmark this page.
Underwriting
ARV (After Repair Value)
The price a property will sell for once all renovations are complete, established from recent comparable sales.
Read definition →MAO (Maximum Allowable Offer)
The highest price an investor can pay for a property and still hit their target profit.
Read definition →70% Rule
A quick underwriting shortcut: pay no more than 70% of ARV minus rehab cost.
Read definition →Comparable Sales (Comps)
Recently sold properties similar to the subject, used to estimate value.
Read definition →Rehab Tiers (Cosmetic / Moderate / Heavy / Gut)
A classification of the scope and cost of renovation work needed on a property.
Read definition →Strategy
BRRRR
Buy, Rehab, Rent, Refinance, Repeat — a rental-acquisition strategy using short-term debt on the buy and long-term debt on the refinance.
Read definition →Wholesale Real Estate
The practice of contracting a distressed property at a discount and assigning the contract to a cash buyer for a fee.
Read definition →Off-Market
A property for sale that is not listed on the MLS or publicly marketed.
Read definition →Motivated Seller
A property owner with a compelling reason to sell below market value quickly.
Read definition →Section 8 Housing
A federal rental assistance program that pays part of the rent for qualified low-income tenants.
Read definition →Process
Assignment of Contract
Transferring the rights of a purchase contract from the original buyer (wholesaler) to a new buyer (end investor).
Read definition →Double Close
Two back-to-back real estate closings on the same day — wholesaler buys from seller, immediately sells to end buyer.
Read definition →Proof of Funds (POF)
Documentation showing a buyer has the cash or financing to close on a property.
Read definition →Earnest Money Deposit (EMD)
A refundable or non-refundable deposit a buyer provides to show commitment to a purchase.
Read definition →Financing
Hard Money Loan
Short-term real estate financing from a private lender, based on the value of the asset rather than borrower income.
Read definition →Private Money Loan
A loan from an individual investor rather than an institutional lender.
Read definition →DSCR Loan
A rental mortgage underwritten based on the property’s cash flow, not the borrower’s personal income.
Read definition →Metrics
Capitalization Rate (Cap Rate)
A property’s annual net operating income divided by its purchase price, expressed as a percentage.
Read definition →Net Operating Income (NOI)
A property’s annual income minus all operating expenses, before mortgage payments and capex.
Read definition →Cash-on-Cash Return
Annual pre-tax cash flow divided by total cash invested, expressed as a percentage.
Read definition →Ready to put these terms to work?
Run the numbers on a real Baltimore wholesale deal using our ARV calculator, or browse current inventory.