Investor Reference
Real Estate
Investing Glossary
Plain-English definitions for every lending and investing term you'll encounter. No jargon, no fluff.
A–Z Reference
23 Terms Defined
ARV (After Repair Value)
The estimated market value of a property after all planned renovations are complete. Used by fix & flip lenders to size loans and assess risk.
Bridge Loan
Short-term financing used to bridge the gap between buying a property and securing permanent financing. LendingStreet closes bridge loans in as few as 10 days with no appraisal.
BRRRR
Buy, Rehab, Rent, Refinance, Repeat — a capital recycling strategy for building a rental portfolio. See our full BRRRR guide.
Cash-Out Refinance
Refinancing an existing property loan for more than the current balance and taking the difference in cash. DSCR cash-out refis allow up to 75% LTV without income docs.
DTI (Debt-to-Income Ratio)
Your total monthly debt payments divided by gross monthly income. Conventional lenders use DTI to qualify borrowers. DSCR loans do not use DTI.
DSCR (Debt Service Coverage Ratio)
Monthly rental income divided by monthly mortgage payment. 1.0x means income equals the payment. Most lenders require 1.1x–1.25x. LendingStreet works with 1.0x minimum.
Draw Schedule
The schedule of disbursements on a rehab loan. Funds are released in stages as renovation work is completed and inspected.
Hard Money Loan
Asset-based, short-term lending for real estate investors. Based on property value rather than borrower income. Faster than conventional with higher rates.
Interest-Only Loan
A loan where monthly payments cover only interest — no principal. Maximizes cash flow during the hold period. Available on select DSCR programs.
LLC (Limited Liability Company)
A business structure that separates personal and business liability. DSCR loans allow borrowing in your LLC — conventional mortgages do not.
LTC (Loan to Cost)
Loan amount divided by total project cost (purchase + rehab). The key metric for fix & flip loans. LendingStreet lends up to 90% LTC.
LTV (Loan to Value)
Loan amount divided by property value. 80% LTV on a $500K property = $400K loan. DSCR purchase loans go to 80% LTV. Cash-out refis go to 75%.
NOI (Net Operating Income)
Gross rental income minus operating expenses (taxes, insurance, maintenance) before debt service. Used in commercial lending underwriting.
Non-QM Loan
Non-Qualified Mortgage — loans that don't meet conventional (Fannie/Freddie) guidelines. DSCR loans are Non-QM. Allows self-employed and investor borrowers who can't qualify conventionally.
No Ratio DSCR
A DSCR loan with no minimum DSCR requirement. No income docs required. Qualifies on the asset alone. Available at LendingStreet for 640+ credit, up to 85% LTV, $100K–$4M. Not available in NY or VT.
Points (Origination)
Upfront fees charged by a lender, expressed as a percentage of the loan. 1 point = 1% of loan amount. Hard money loans typically charge 1–3 points.
Prepayment Penalty
A fee charged if you pay off a loan early. Many DSCR loans have 3–5 year prepay periods. Ask about prepay before signing.
Private Money Lender
A non-bank lender that provides capital for real estate investors. Faster and more flexible than banks. LendingStreet is a private money lender/broker.
Rehab
The renovation work done on an investment property. Fix & flip loans fund rehab costs in draws as work is completed.
Seasoning
The amount of time you must own a property before a lender will refinance it. Typically 6–12 months for cash-out refis.
STR (Short-Term Rental)
Properties rented on platforms like Airbnb or VRBO. DSCR loans for STRs use projected rental revenue rather than lease income.
Title
Legal ownership of a property. Held in your name, your LLC, or a trust. DSCR loans allow LLC title from closing.
Underwriting
The lender's process of evaluating a loan application. For DSCR loans — property value, rental income, and credit. For hard money — deal economics and ARV.