Investor Lending Glossary: Key Terms for Smarter Real Estate Decisions
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The following new glossary terms are recommended additions based on keyword research and competitive analysis. Each includes a concise, SEO-rich definition and interlinks to related glossary topics where applicable.
Amortization - The process of gradually paying off a loan through regular principal and interest payments. Private lenders often offer interest-only loans rather than fully amortizing ones, improving investor cash flow.
Appreciation - An increase in property value over time due to market conditions, inflation, or renovations. Investors leverage appreciation to build equity and increase ROI.
BRRRR Method - A real estate investing strategy—Buy, Rehab, Rent, Refinance, Repeat—that helps investors scale rental portfolios. Unitas supports BRRRR investors through bridge and DSCR refinance programs.
Balloon Payment - A large lump-sum payment due at the end of a short-term loan. It keeps interim payments low but requires a defined exit strategy (sale or refinance) at loan maturity.
Bridge Loan - A short-term financing option used to acquire or renovate a property before permanent financing or sale. Unitas Funding offers bridge loans for fix-and-flip, new construction, and value-add projects.
Capital Stack - The hierarchy of financing layers in a project, typically including senior debt, mezzanine debt, preferred equity, and common equity. Understanding the capital stack helps investors gauge risk and return.
Cash Flow - The net income generated by a property after operating expenses and debt service. Positive cash flow supports loan repayment and long-term investment stability.
Cash-on-Cash Return - A profitability metric calculated as annual pre-tax cash flow divided by total cash invested. This helps investors measure efficiency of deployed capital.
Closing Costs - Expenses paid at property closing—title, escrow, appraisal, recording, and origination fees. Investors should include closing costs when calculating total project cost or equity contribution.
Cross-Collateralization - The use of multiple properties to secure a single loan. This structure allows borrowers to leverage more equity and reduce upfront capital requirements.
Debt Service - The total amount required to cover loan principal and interest during a specified period. Used to calculate the Debt Service Coverage Ratio (DSCR) in rental loan underwriting.
Due Diligence - The pre-closing process of verifying title, valuation, and borrower documentation to ensure accurate underwriting. Comprehensive due diligence minimizes risk and protects lender and investor interests.
Equity Partner - An investor who contributes capital to a project in exchange for an ownership share or profit split. Equity partnerships help scale deals without over-leveraging.
Exit Strategy - The borrower’s defined plan to repay or exit a loan—via sale, refinance, or permanent financing. Every Unitas loan requires a clear exit strategy aligned with term and loan structure.
Gap Financing - Interim capital that fills funding gaps between senior debt and total project cost. Commonly used in renovation or new construction projects.
Ground-Up Construction - Financing provided for the construction of new properties starting from land acquisition. Unitas supports ground-up builders through flexible draw schedules and quick turnarounds.
Holding Period - The time between acquisition and sale or refinance. Affects tax treatment, capital gains exposure, and return projections.
Interest Reserve - Funds held within the loan to cover monthly interest payments. Interest reserves improve cash flow and ensure timely payments throughout construction or renovation.
Internal Rate of Return (IRR) - A performance metric estimating total project profitability over time, factoring in cash flow timing. Used to compare potential real estate investments.
Private Money Lending - Non-bank financing provided by private investors or direct lenders for investment properties. Unitas Funding operates as a direct lender with institutional backing and fast closings.
Real Estate Syndication - A collaborative investment structure where multiple investors pool capital to acquire larger assets. The syndicator manages the deal while investors share returns.
Spec Home - A property built without a committed buyer, typically sold upon completion. Spec home financing supports builders capitalizing on demand in strong housing markets.
Stabilization Period - The period during which a property achieves consistent occupancy and income after renovation or construction. Stabilization is a prerequisite for DSCR refinancing.
Value-Add Property - A property with potential for higher income and appreciation through improvements or repositioning. Value-add strategies increase both ARV and investor returns.
