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On one of our most popular episodes, I explained common real estate terms that confuse and overwhelm new investors. I get a lot of questions about real estate terminology. I often feel like real estate jargon can be confusing and too inclusive.
Today on Investing in Real Estate, I’m discussing more real estate lingo! I’ll explain more common real estate terms and phrases mean. If you’ve ever felt overwhelmed by real estate terms, this episode is for you!
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If you missed episode 33, you might want to go back and listen, as it is part one to this episode. There you can find definitions and examples of real estate terms such as ROI, cash-on-cash return, CAPEX, rent-roll, and tenant turnover. On this episode, I want to get even more specific.
You might hear commercial real estate investors use the term “pro forma.” This is not used exclusively in real estate; it’s a business term. Pro forma is a projected figure of financial results. In real estate, pro forma is applied to the projected income of a property. For example, how much rent the property will bring in, and what the expenses will be.
Another term you might hear often in the real estate world is operating expenses. In real estate, operating expenses are costs like property insurance, property taxes, and utilities. An operating expense is any cost that deducts from overall cash flow on a property.
On today’s show, I’ll go more in depth into these terms, and how they apply to real estate. I’ll also discuss NOI, and lease up fees. If you’re a new real estate investor, stick around for episode 111 of Investing in Real Estate.
If you’re ready to begin building a passive income through rental real estate, book a FREE call with my team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.
On this episode you’ll learn:
- What types of expenditures are not included in NOI?
- Where does the term pro forma come from?
- How much should you expect to pay for a lease up fee?
- What expenses does a lease up fee cover?
- And much more!