The Mevak Glossary
The words income real estate is priced in, defined the way we use them in real deals. Plain language, a Miami example where it earns one, and the Spanish equivalent for every term.
10-Year Recertification
The 10-year recertification is the recurring cycle that follows the first one.
En español: Recertificación de 10 añosOwnership1031 Exchange
A 1031 exchange lets a US investment-property owner sell and roll the proceeds into another investment property while deferring the capital gains tax a plain sale would trigger.
En español: Intercambio 1031Ownership40-Year Recertification
The 40-year recertification is what everyone still calls Miami-Dade's building recertification program, and the name is now wrong.
En español: Recertificación de 40 añosMarketsAbsorption
Absorption is the rate at which available space is taken up over a period: units leased, net of units given back.
En español: AbsorciónFinanceAmortization
Amortization is the schedule by which a loan is repaid through level payments that cover interest first and principal second.
En español: AmortizaciónFinanceBalloon Payment
A balloon payment is the unamortised balance that comes due in one sum when a loan reaches the end of its term.
En español: Pago global (balloon)MarketsBid-Ask Spread
The bid-ask spread is the distance between what sellers are asking and what buyers are willing to pay.
En español: Brecha entre pedido y oferta (bid-ask spread)DevelopmentBoundary Survey
A boundary survey is a licensed surveyor's determination of where a parcel's lines actually run on the ground, built from the recorded description and from monuments found and set.
En español: Levantamiento de linderos (boundary survey)FinanceBridge Loan
A bridge loan is short-term financing for a property that cannot yet qualify for permanent debt: mid-renovation, mid-lease-up, or bought faster than a bank could move.
En español: Préstamo puente (bridge loan)DevelopmentBy-Right
By-right means a project complies with every applicable standard and therefore requires no discretionary approval: the permit is administrative, and no board votes on whether to allow it.
En español: Por derecho (by-right)InvestmentCap Rate (Capitalization Rate)
The capitalization rate is a building's net operating income divided by its price, expressed as a percentage.
En español: Tasa de capitalización (cap rate)MarketsCap Rate Spread
The cap rate spread is the distance between property cap rates and the yield on the ten-year Treasury, the rate investors treat as risk-free.
En español: Diferencial de la tasa de capitalización (cap rate spread)OwnershipCapEx (Capital Expenditure)
Capital expenditure is money spent on the building itself rather than on running it: a roof, a new electrical panel, windows, a repiping, a parking lot.
En español: CapEx (gasto de capital)FinanceCapital Stack
The capital stack is the ordered list of everyone whose money is in a deal and who gets paid back first: senior debt at the bottom, then any secondary debt, then preferred equity, then common equity on top.
En español: Estructura de capital (capital stack)FinanceCash Flow
Cash flow is what actually lands in the owner's pocket in a period: net operating income minus the mortgage payment and minus the capital dollars the building consumed.
En español: Flujo de cajaInvestmentCash-on-Cash Return
Cash-on-cash return is the cash a property puts in the owner's pocket in a year, divided by the cash he actually put into it.
En español: Retorno sobre efectivo (cash-on-cash)FinanceCash-Out Refinance
A cash-out refinance replaces an existing loan with a larger one and hands the owner the difference.
En español: Refinanciamiento con retiro de efectivo (cash-out refinance)DevelopmentCertificate of Occupancy (CO)
A certificate of occupancy is the building department's written statement that a completed building meets code and may be legally occupied.
En español: Certificado de ocupación (CO)OwnershipCertificate of Use
A certificate of use is the local permission to operate a particular activity at a particular address, including renting out residential units.
En español: Certificado de uso (certificate of use)MarketsComparable Sale
A comparable sale is a closed transaction used as evidence of what a subject property is worth.
En español: Venta comparable (comparable sale)OwnershipCost Segregation
A cost segregation study breaks a building's purchase price into its components and assigns each one the recovery period the tax code actually allows.
En español: Segregación de costos (cost segregation)MarketsDays on Market
Days on market counts how long a property has been listed before going under contract.
En español: Días en el mercado (DOM)FinanceDebt Yield
Debt yield is net operating income divided by the loan amount.
En español: Rendimiento de la deuda (debt yield)DevelopmentDensity
Density is how many dwelling units a zoning code allows on a piece of land, usually stated as units per acre.
En español: DensidadOwnershipDepreciation
Depreciation is the annual deduction the tax code allows for the wearing out of an income property's improvements.
En español: DepreciaciónOwnershipDepreciation Recapture
Depreciation recapture is the tax owed at sale on the depreciation an owner already deducted.
En español: Recaptura de depreciación (depreciation recapture)DevelopmentDevelopment Envelope
The development envelope is the three-dimensional shape a parcel's rules allow: the volume left after height limits, setbacks, density caps, parking requirements, and lot coverage have each taken their bite.
En español: Envolvente de desarrolloMarketsDistressed Property
A distressed property is one whose owner has less time than the asset does.
En español: distressed property (propiedad bajo presión de venta)ClosingDocumentary Stamp Tax
Florida taxes the transfer of real property by deed.
En español: Impuesto de timbre documental (doc stamps)FinanceDSCR (Debt Service Coverage Ratio)
The debt service coverage ratio is net operating income divided by the annual loan payment.
En español: Cobertura de deuda (DSCR)DevelopmentEasement
An easement is a recorded right for someone else to use part of a parcel for a stated purpose: a utility line, a drainage swale, a shared driveway, access to a parcel behind it.
En español: Servidumbre (easement)InvestmentEconomic Vacancy
Economic vacancy is the share of potential rent a building never collects, for any reason: empty units, unpaid rent, concessions, employee or owner units, and the downtime between tenants.
En español: Vacancia económicaClosingEffective Date
The effective date is the day a contract becomes binding: when the last party signs or initials the final offer and that signed contract is delivered back.
En español: Fecha de vigencia (effective date)MarketsEffective Rent
Effective rent is what a lease actually pays over its term once concessions are spread across it: free months, moving allowances, reduced deposits.
En español: Renta efectivaInvestmentEquity Multiple
The equity multiple is every dollar returned to the investor divided by every dollar he put in, across the whole hold: operating cash flow plus what is left after the sale pays off the loan and its costs.
En español: Múltiplo de capital (equity multiple)ClosingEscrow Deposit
The escrow deposit is the buyer's money, held by a neutral third party, that shows the offer is real.
En español: Depósito en garantía (escrow)ClosingEstoppel Letter
An estoppel letter is a written statement of what is actually owed and agreed, given by the party in a position to know and binding on them afterward.
En español: Carta de estoppelInvestmentExit Cap Rate
The exit cap rate is the capitalization rate assumed when a projection sells the property at the end of the hold.
En español: Tasa de salida (exit cap)OwnershipFIRPTA (Foreign Investment in Real Property Tax Act)
FIRPTA is the US federal rule that makes the buyer withhold a slice of the sales price, generally 15%, when the seller of US real estate is a foreign person, and send it to the IRS as a deposit against the seller's tax.
En español: FIRPTA (Foreign Investment in Real Property Tax Act)DevelopmentFLR (Floor Lot Ratio)
Floor lot ratio caps how much building area a parcel can carry: lot size multiplied by the ratio equals maximum buildable area.
En español: FLR (coeficiente de edificabilidad)InvestmentGRM (Gross Rent Multiplier)
The gross rent multiplier is the price divided by the property's annual gross rent.
En español: Multiplicador de renta bruta (GRM)DevelopmentHard Costs
Hard costs are the cost of the physical building: site work, structure, envelope, systems, finishes, and the contractor's general conditions, overhead and fee.
En español: Costos duros (hard costs)DevelopmentImpact Fees
Impact fees are one-time charges a local government imposes on new development to fund the share of public infrastructure the new units will consume: roads, parks, schools, fire and police.
En español: Cargos de impacto (impact fees)InvestmentInclusion Event
An inclusion event is anything that ends the deferral early and pulls the postponed gain back into taxable income.
En español: Evento de inclusión (inclusion event)ClosingInspection Period
The inspection period is the window after the effective date in which the buyer investigates the property and can cancel.
En español: Período de inspección (inspection period)DevelopmentIntensity
Intensity is how much building a code allows on a piece of land, measured in floor area rather than in units.
En español: IntensidadFinanceInterest-Only
An interest-only period is a stretch at the start of a loan when payments cover interest and nothing else.
En español: Solo interés (interest-only)InvestmentIRR (Internal Rate of Return)
The internal rate of return is the annual rate at which an investment's cash flows, in and out, exactly balance.
En español: Tasa interna de retorno (TIR, IRR)InvestmentJudicial Sale (Foreclosure Auction)
A judicial sale is the court-ordered auction that ends a Florida foreclosure.
En español: Subasta judicial (foreclosure auction)DevelopmentLand Residual Value
Land residual value is what a developer can rationally pay for a site: the value of the finished project, minus every cost to build it, minus the profit the risk demands.
En español: Valor residual del sueloFinanceLeverage
Leverage is using borrowed money to control a larger asset than cash alone would buy.
En español: Apalancamiento (leverage)ClosingLis Pendens
A lis pendens is a notice recorded in the public records announcing that a lawsuit affecting a specific property is pending.
En español: Lis Pendens (aviso de litigio pendiente)DevelopmentLive Local Act
The Live Local Act is a Florida law that overrides local zoning for qualifying housing projects: where a development sets aside enough affordable or workforce units, the state requires the city or county to allow it administratively, at densities and heights the local code would not otherwise permit.
En español: Live Local ActFinanceLoan Constant
The loan constant is annual debt service divided by the loan amount, expressed as a percentage.
En español: Constante del préstamoFinanceLoan Maturity
Maturity is the date the loan must be repaid in full, regardless of how the property is performing.
En español: Vencimiento del préstamoInvestmentLoss to Lease
Loss to lease is the gap between what units would rent for at market today and what the current leases actually charge.
En español: Brecha de renta (loss to lease)DevelopmentLot Coverage
Lot coverage is the share of a lot that a building's footprint may occupy, stated as a percentage.
En español: Ocupación del lote (lot coverage)FinanceLTV (Loan-to-Value)
Loan-to-value is the loan amount divided by the property's value.
En español: Préstamo a valor (LTV)DevelopmentMiami 21
Miami 21 is the zoning code of the City of Miami, in force since 2009.
En español: Miami 21OwnershipMilestone Inspection
A milestone inspection is the structural inspection Florida requires of condominium and cooperative buildings three stories or more.
En español: Inspección milestoneClosingMunicipal Lien Search
A municipal lien search asks the city and county what they are owed and what they have open against a property: unpaid utilities, code violations, open or expired permits, special assessments, and unrecorded liens.
En español: Búsqueda de gravámenes municipales (municipal lien search)InvestmentNOI (Net Operating Income)
Net operating income is what a property earns from operations in a year: all collected income minus operating expenses, before any mortgage payment, income tax, or capital projects.
En español: Ingreso operativo neto (NOI)OwnershipNon-Homestead Assessment Cap
Florida limits how fast the assessed value of non-homestead property can rise: no more than ten percent a year, regardless of what the market does.
En español: Tope de avalúo para no residencia principal (non-homestead cap)FinanceNon-Recourse
A non-recourse loan is secured by the property alone.
En español: Préstamo sin recurso (non-recourse)ClosingOpen Permit
An open permit is work that was permitted but never finalled: the file is still open at the building department because a required inspection was never passed or never called.
En español: Permiso abierto (open permit)InvestmentOperating Expense Ratio
The operating expense ratio is total operating expenses divided by effective gross income, expressed as a percentage.
En español: Razón de gastos operativosInvestmentOpportunity Zone (QOZ)
A qualified opportunity zone is a census tract the federal government has designated so that investors who roll a capital gain into a fund operating there get specific tax treatment.
En español: Zona de Oportunidad (Opportunity Zone)DevelopmentParking Requirement
A parking requirement is the number of spaces a zoning code demands for a given use and size.
En español: Requisito de estacionamientoFinancePoints and Origination Fee
Points are fees charged as a percentage of the loan amount, paid at closing.
En español: Puntos y comisión de originación (points)FinancePrepayment Penalty
A prepayment penalty is what a borrower owes for paying a loan off before maturity.
En español: Penalidad por prepago (prepayment penalty)InvestmentPrice Per Unit
Price per unit is the total price divided by the number of dwelling units.
En español: Precio por unidadInvestmentProforma
A proforma is the projected income and expense statement for a property: what the next owner is being asked to believe.
En español: ProformaClosingProration
Proration is the division of ongoing costs and income between seller and buyer at the closing date: property taxes, collected rent, association dues, and utility and service periods.
En español: ProrrateoDevelopmentPublic Works
Public Works is the part of a project that happens outside the property line: the sidewalk, the curb, drainage, paving, street trees, and the water and sewer connections, along with the permits to touch any of it.
En español: Obras públicasInvestmentQOF (Qualified Opportunity Fund)
A qualified opportunity fund is the corporation or partnership through which money has to travel to reach an Opportunity Zone.
En español: QOF (Qualified Opportunity Fund)FinanceRecourse
A recourse loan is one where the lender can pursue the borrower personally, and not only the property, if the debt is not repaid.
En español: Préstamo con recurso (recourse)OwnershipRent Roll
A rent roll is the schedule of every unit in a building and what it earns: the tenant, the rent, the lease start and end, the deposit held, and whether the unit is occupied.
En español: Rent roll (registro de rentas)ClosingREO (Real Estate Owned)
REO is property an institution owns because it took it back, at a foreclosure sale or by deed in lieu, and now holds as an asset it never wanted.
En español: REO (Real Estate Owned)DevelopmentRight of Way
A right of way is the strip of land held publicly for a street and everything that belongs to it: pavement, sidewalk, swale, and the utilities running beneath.
En español: Derecho de vía (right of way)OwnershipSecurity Deposit
A security deposit is money a tenant gives a landlord to secure performance of the lease.
En español: Depósito de garantía (security deposit)DevelopmentSetback
A setback is the mandatory distance a building must keep from its lot lines: front, sides, and rear.
En español: Retiro (setback)FinanceShort Sale
A short sale is a sale of property for less than the debt secured against it, which the lender has to approve because it is being asked to release its mortgage without being paid in full.
En español: short sale (venta por menos que la deuda)OwnershipSIRS (Structural Integrity Reserve Study)
A structural integrity reserve study is the funding side of Florida's condominium safety regime.
En español: SIRS (estudio de reservas de integridad estructural)DevelopmentSoft Costs
Soft costs are everything a project spends that is not the physical building: design and engineering, permits and impact fees, survey and testing, legal and accounting, insurance, financing costs and interest during construction, marketing, and the developer's own overhead.
En español: Costos blandos (soft costs)MarketsSubmarket
A submarket is the smallest area within which properties genuinely compete for the same tenant and the same buyer.
En español: SubmercadoDevelopmentSubstantial Improvement
Substantial improvement is the test an existing building has to pass before a fund's purchase counts as qualifying Opportunity Zone property.
En español: Mejora sustancial (substantial improvement)MarketsSupply Pipeline
The supply pipeline is everything that is coming: proposed, approved, permitted, and under construction, with the quarter each is expected to deliver.
En español: Oferta en desarrollo (pipeline)OwnershipT-12 (Trailing Twelve)
A T-12 is the operating statement for the last twelve months: what the property actually collected and actually spent, month by month, through the most recent closed period.
En español: T-12 (doce meses corridos)DevelopmentTemporary Certificate of Occupancy (TCO)
A temporary certificate of occupancy allows part of a building to be occupied before the whole project is finished, for a limited time and on stated conditions.
En español: Certificado temporal de ocupación (TCO)FinanceTerm Sheet
A term sheet is the lender's written outline of the loan it is prepared to consider: amount, rate structure, term, amortization, the maximum loan-to-value, the minimum coverage, and the conditions that follow.
En español: term sheet (hoja de términos)ClosingTitle Commitment
A title commitment is the title insurer's written statement of the policy it will issue, and on what conditions.
En español: Compromiso de título (title commitment)ClosingTitle Exception
A title exception is something the title policy will NOT cover: an easement, a restrictive covenant, a plat note, a mineral reservation, an encroachment shown by survey.
En español: Excepción de título (title exception)MarketsTransaction Volume
Transaction volume is how much actually traded in a market over a period, counted in deals, in units, or in dollars.
En español: Volumen de transaccionesDevelopmentTransect Zone
A Transect Zone is the category Miami 21 assigns to every lot, and it is the input to almost everything else.
En español: Zona de transecto (transect)OwnershipTRIM Notice
The TRIM notice, for Truth in Millage, is the statement every Florida property owner receives in August showing the property appraiser's value, the exemptions applied, the rates each taxing authority proposes, and what the tax bill will be if those rates are adopted.
En español: TRIM Notice (aviso de impuestos propuestos)FinanceUnderwriting
Underwriting is the process by which a lender or investor rebuilds a property's numbers to decide what to risk on them: income verified line by line, expenses restated the way the next owner will pay them, and the resulting statement run through the tests that size the loan.
En español: underwriting (análisis del riesgo)OwnershipVAB Appeal
A VAB appeal is a petition to the county Value Adjustment Board contesting the property appraiser's value, a denied exemption, or a classification.
En español: Apelación ante el VABMarketsVacancy Rate
The vacancy rate is the share of units, or of rentable area, sitting empty at a point in time.
En español: Tasa de vacanciaInvestmentValue-Add
Value-add describes a property whose income can be raised by doing specific work: renovating units, correcting below-market rents, fixing operations, adding a use, or curing something that keeps buyers away.
En español: Valor agregado (value-add)DevelopmentZoning
Zoning is the local rule that says what may be built on a piece of land and how it may be used.
En español: ZonificaciónTerms arrive with the writing.
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