Understanding NOI
Net operating income is property income minus operating expenses, before debt service and certain other costs.
Investor education
Understand the concepts behind real estate decisions.
These brief introductions are a starting point for learning, not a substitute for independent evaluation.
Cap Rates
A capitalization rate compares a property’s NOI with its price or value. It is one lens, not a complete risk assessment.
DSCR
Debt service coverage ratio compares income available for debt payments with the required payments.
Cash-on-Cash Return
This measure compares annual pre-tax cash flow with the cash invested. Assumptions and timing matter.
Preferred Returns
A preferred return describes a distribution priority in some investment structures. Its terms depend on governing documents and available cash.
LP vs GP
A limited partner generally contributes capital; a general partner typically manages the investment and its operations. Specific rights vary by agreement.
Multifamily Due Diligence
Review leases, rent collections, expenses, physical condition, title, insurance, taxes, and local conditions before committing to a plan.
Value-Add Real Estate
A value-add plan aims to improve operations or property quality. It requires capital, time, and realistic execution assumptions.
How Passive Real Estate Investing Works
A passive investor may participate through an ownership structure while an operating team manages the asset. Risks, liquidity, reporting, and rights depend on the arrangement.