- Seller financing
- The seller acts as your lender: you pay them in instalments instead of a bank.
- Subject-to
- You take over the property while the existing mortgage stays in the seller's name.
- Due-on-sale clause
- Clause that lets the lender call the loan due as soon as the property changes hands.
- Wrap mortgage
- A new loan wrapped around the existing mortgage: the seller finances your purchase on their own terms plus a margin, you pay the seller monthly and the seller keeps paying their bank. The rate spread is their profit. Watch the due-on-sale clause and have a title or servicing company track the payments.
- Land contract
- Instalment sale where the deed only transfers after the final payment.
- Lease option
- You rent with the right to buy later at a price agreed up front.
- Novation
- The lender replaces the old borrower with you; the loan officially becomes yours.
- Assumable mortgage
- A loan you may officially take over with lender approval, including the old interest rate.
- ARV
- After repair value: what the property is worth once the renovation is finished.
- BRRRR
- Buy, rehab, rent, refinance, repeat — pulling your own cash back out.
- DSCR
- Debt service coverage ratio: net operating income divided by yearly debt service.
- NOI (Net Operating Income)
- Net operating income: rent minus operating expenses, before debt service.
- T12 (Trailing Twelve Months)
- Trailing twelve months: the actual income and expenses of the past twelve months, usually from the seller's books. Use the T12 instead of a projection to see what a property really earned, including vacancy, repairs and unpaid rent.
- HOA (Homeowners Association)
- Homeowners association: the owners' association of a complex or neighbourhood. You pay a monthly or quarterly fee for shared maintenance, and the rules may restrict renting (or room-by-room renting). Always include the HOA fee in your cashflow and request the rules before you buy.
- Cap rate
- Net operating income divided by the purchase price; a quick way to compare properties.
- Cash-on-cash
- Yearly cashflow divided by the cash you actually put in.
- PITI (Principal, Interest, Taxes, Insurance)
- Principal, interest, taxes and insurance: the four fixed monthly housing costs.
- HUD (U.S. Department of Housing and Urban Development)
- U.S. Department of Housing and Urban Development: the federal housing agency. HUD sets the Fair Market Rents (the rent caps per ZIP code used for housing assistance) and funds the Section 8 vouchers that cover part of a tenant's rent.
- PHA (Public Housing Agency)
- Public housing agency: the local authority that issues Section 8 vouchers and inspects and approves your property. In practice the PHA decides how fast you can place a voucher tenant, what the payment standard is and when the rent lands in your account.
- Balloon payment
- A large final payment that pays off the loan in one go, often after 3 to 7 years.
- Seasoning
- The waiting period a lender requires before you may refinance at the new value.
- Letter of intent (LOI)
- A non-binding letter putting your offer and terms in front of the seller on one page.
- Earnest money
- A deposit held in escrow showing your offer is serious.
- Escrow
- A neutral third party holding money and documents until closing is done.
- Title
- The legal ownership record; a title search shows whether claims are attached to it.
- 1031 exchange
- US rule letting you roll gains into the next property without paying tax now.
- Hard money
- Short-term loan from a private lender: expensive but fast, often for the rehab phase.
- HELOC
- A revolving credit line against the equity in a property you already own: you draw what you need, pay interest only on the drawn amount and repay at your own pace. Often used as the down payment or rehab budget for the next deal.
- Pad split
- Room-by-room rental: one house is split into several lockable rooms with a shared kitchen and bathroom, each on its own lease. It usually brings in far more rent per month than a single family lease, but takes more management and must fit local rules.
- Off-market
- A property not listed on the MLS, so it is for sale without the competition.
- Motivated seller
- A seller under time pressure (divorce, probate, arrears) who is open to creative terms.