Real Estate Investing Terms: The Complete Glossary for Florida Investors
Why Every Investor Needs to Master These Terms
Real estate investing has its own language. When your agent says "the DSCR on this fourplex is 1.12 but the LTV maxes at 75%," you need to instantly understand whether that's a deal or a pass.
SpillDeals calculates all of these metrics automatically for every FL listing — but understanding what they mean is what separates investors who close from investors who analyze forever.
A–C: ARV, Cap Rate, Cash Flow, CoC ROI
The estimated market value of a property after renovations are complete. Used to calculate max allowable offer on fix-and-flip deals: MAO = (ARV × 0.70) − Rehab Costs. ARV is based on comparable recent sales (comps) within 0.5 miles of similar size and condition.
Annual net operating income divided by property value: Cap Rate = NOI / Property Value. A 7% cap rate means the property produces 7 cents of NOI for every $1 of value. Higher cap = more income relative to price. Florida markets range 4-8% for residential rentals — anything above 6% is strong.
Gross rent minus ALL expenses: mortgage (PITIA), vacancy (8-10%), repairs (5-10% of rent), property management (8-12%), and CapEx reserve (5%). Positive cash flow means the property pays you every month. SpillDeals shows cash flow for each of 17 loan types on every deal.
Annual pre-tax cash flow divided by total cash invested (down payment + closing costs + rehab): CoC = Annual Cash Flow / Total Cash Invested. Target: 8-12%+ for Florida rentals. This is your real annual return on what you actually put in — the metric sophisticated investors use to compare deals.
D–L: DSCR, Equity, GRM, HCV, LTV
Monthly gross rent divided by monthly PITIA payment: DSCR = Gross Rent / (P+I+T+I+A). Lenders require minimum 1.0-1.25 for DSCR loans. A 1.25 DSCR means the property earns 25% more than it costs to carry. DSCR loans don't require W2 income — they qualify based on property cash flow alone. Compare DSCR loan options →
Property value minus outstanding loan balance. Equity grows in three ways: (1) appreciation — property value rises; (2) amortization — mortgage is paid down; (3) forced appreciation — rehab increases value. The BRRRR method is designed to maximize forced appreciation then pull equity out via cash-out refinance.
Purchase price divided by annual gross rent: GRM = Price / Annual Rent. Quick screen for rentals — lower is better. GRM of 8 = property price is 8× annual rents. Florida markets: Jacksonville (8-10×), Tampa (10-13×), Miami (14-18×). Under 10× is generally cashflow-positive with conventional financing.
Federal rental assistance program where HUD pays 70-90% of a tenant's rent directly to the landlord. HCV payment standards are published by county — in Duval County (Jacksonville), a 2BR gets $1,490/mo from the government. See FL Section 8 payment standards →
Loan amount divided by property value: LTV = Loan Amount / Appraised Value. Lower LTV = less risk for lender = better rate for you. FHA: up to 96.5% LTV (3.5% down). Conventional investment property: 75-80% max LTV. Hard money: 65-70% of ARV. DSCR: typically 70-80% LTV.
M–Z: NOI, PITIA, PITI, ROI, Vacancy Rate
Gross rents minus all operating expenses — before debt service (mortgage). NOI = Gross Rent − (Vacancy + Repairs + Management + Taxes + Insurance). NOI is the core of commercial underwriting. Cap rate = NOI ÷ price. NOI doesn't subtract mortgage because the mortgage changes based on who buys it — but the property's income doesn't.
Your full monthly mortgage obligation including all components. This is what DSCR lenders compare against rent. Florida non-homestead property taxes run 1.5-2.2% of assessed value annually. Insurance in coastal FL can be $300-600/mo on a single-family — always get quotes before you close.
Total return divided by total cash invested. In real estate, ROI includes cash flow + principal paydown + appreciation + tax benefits. A property with modest monthly cash flow can still produce 18-25% total annual ROI when appreciation is factored in. SpillDeals shows CoC ROI (cash only) and notes appreciation separately.
Percentage of time a unit sits empty. Florida average: 7-10% for long-term rentals. Use 8% minimum in your underwriting — that's 1 month empty per year. STR/Airbnb vacancy is higher (20-35% nights unbooked) but offset by higher nightly rates. Section 8 tenants reduce effective vacancy because they stay 3-4 years on average.
Monthly savings set aside for major repairs: roof ($10-18K every 20 years), HVAC ($4-8K every 12-15 years), water heater ($800-1,500 every 10 years), appliances. Budget 5-10% of gross rents for CapEx. Ignoring CapEx is the #1 mistake new landlords make — the AC breaks, you have no reserve, you go negative for 3 months.