Glossary

Key Terms

ARV (After Repair Value)

The estimated value of a property after all renovations and repairs are completed. This is a critical metric for "Rehab" type deals.

GP (General Partner)

The operator or sponsor of the deal. The GP is responsible for finding the deal, managing the asset, and executing the business plan.

IRR (Internal Rate of Return)

A metric used in financial analysis to estimate the profitability of potential investments. It is the discount rate that makes the net present value (NPV) of all cash flows equal to zero.

Tip In Fund Flow, the Projected IRR must be a positive percentage when creating a deal.

LP (Limited Partner)

The passive investor who provides capital for the deal but does not have day-to-day management responsibilities.

Cash on Cash Return (CoC)

A rate of return that calculates the cash income earned on the cash invested in a property. It is calculated by dividing the annual pre-tax cash flow by the total cash invested.