Investor vocabulary, translated.

Gross monthly rent divided by the full monthly payment (PITIA). 1.00 means the rent exactly covers the payment. It is the number a DSCR lender qualifies the property on — your personal income doesn’t enter the math.

Principal, interest, taxes, insurance and association dues — the complete monthly cost of owning the property with the loan. It is the denominator in the DSCR formula. Leave out the HOA and your ratio is wrong.

Total monthly rent before any expenses, vacancy or management. DSCR uses gross rent; your real cash flow should not.

Annual cash flow after all expenses divided by the cash you put in (down payment, closing costs, rehab). It is the return on your actual money, which is why investors care about it more than the lender does.

Net operating income (rent minus operating expenses, before the mortgage) divided by purchase price. A way to compare properties regardless of financing. It tells you nothing about whether you can get the loan.

Purchase price divided by annual gross rent. A quick screening number — lower means the price is cheaper relative to rent. Useful for sorting listings, not for making a decision.

Rent minus operating expenses (taxes, insurance, management, maintenance, vacancy) — before debt service. Commercial lenders underwrite NOI; residential DSCR lenders use gross rent against PITIA instead.

Loan amount divided by appraised value or price, whichever is lower. An 80% LTV means 20% down. Cash-out refinances are usually capped at a lower LTV than purchases.

Your monthly debt payments divided by your monthly income. Conventional and bank statement loans use it; DSCR loans do not — that is the entire point of DSCR.

A business-purpose, non-owner-occupied investment property loan qualified on the property’s rent (DSCR) rather than the borrower’s income. No tax returns, no DTI, LLC vesting allowed, no agency ten-property cap. Typically a somewhat higher rate than conventional.

“Non-qualified mortgage” — loans that fall outside the federal qualified-mortgage definition and aren’t sold to Fannie Mae or Freddie Mac. DSCR, bank statement, asset depletion and non-warrantable condo loans are all Non-QM. Flexible documentation, priced for it.

A loan that meets Fannie Mae or Freddie Mac guidelines and is sold to them. Full income documentation, personal-name vesting, a cap on financed properties — and usually the lowest rate available for the deal.

A Non-QM loan that documents income with 12 or 24 months of personal or business bank deposits instead of tax returns. Built for self-employed borrowers whose write-offs understate real income.

A qualifying method that converts liquid assets into monthly income by dividing them over a set number of months. For investors, retirees and the asset-rich, paycheck-light.

A loan where the payment covers only interest for an initial period (often 10 years), then converts to a fully amortizing payment. Lower payment now, no principal paydown during the IO period. Some DSCR programs calculate the ratio on the IO payment.

A fee for paying the loan off early — common on DSCR loans for the first one to five years, typically in exchange for a lower rate. If you plan to refinance or sell soon, structure around it. Availability varies by state and program.

How long you’ve owned a property (or held funds in an account) before a lender will count it. Cash-out refinances commonly require about six months of ownership; reserves typically need to sit for 60 days.

Liquid funds left after closing, measured in months of PITIA. DSCR programs typically want several months on the subject property and sometimes on other rentals you own.

An agreement that holds your interest rate for a set period while the loan closes. Lock terms, extensions and costs vary; Tiaira walks you through when to lock on each deal.

A lender’s initial assessment of what you can borrow based on credit and a review of your situation. It is not a commitment to lend. On DSCR files it is fast because there is no income to document.

When an LLC is the borrower, the members typically sign a personal guaranty making them responsible for the debt. The entity holds title; the humans back the loan.

The appraiser’s Single-Family Comparable Rent Schedule (Fannie Mae Form 1007). It documents market rent for a single-family rental and is what a DSCR lender uses when there is no lease. The 2–4 unit version is Form 1025.

A condominium project that fails Fannie Mae or Freddie Mac eligibility rules — investor-heavy, in litigation, low reserves, excess commercial space, condotel operation, developer control. Financed with portfolio and Non-QM loans at a higher down payment and rate.

A condo project that meets agency eligibility standards, so loans on it can be sold to Fannie or Freddie. Cheaper financing, more buyers when you sell.

A condo project operated like a hotel — front desk, nightly rentals, rental pools, hotel amenities. Ineligible for agency loans; some Non-QM programs will finance them with larger down payments.

Buying a 2–4 unit property as your primary residence, living in one unit and renting the others. Access to owner-occupied low-down-payment programs plus rental income to help qualify. The most common first step into investing.

Buy, Rehab, Rent, Refinance, Repeat. Purchase a property needing work, improve it, place a tenant, refinance on the new value to recover capital, and redeploy. The refinance step has seasoning and LTV rules — plan them before you buy.

What a property will appraise for after renovation. BRRRR math lives and dies on an honest ARV from real comps.

A property rented nightly or weekly (Airbnb, VRBO) rather than on a lease. Financed on DSCR programs that accept booking history or market data; local ordinances determine whether you can operate at all.

Taking title to the property in a limited liability company rather than your personal name. Allowed on DSCR loans (the LLC is the borrower); not allowed on agency loans at closing.

In Minnesota and some other states, property that is not the owner’s primary residence is taxed at a higher classification rate. Use the non-homestead figure in your PITIA or your DSCR will be optimistic.

A dwelling-fire or landlord policy covering a rental property and typically loss of rents. It costs more than a homeowners policy and is what the lender requires on a non-owner-occupied property.

A list of every property you own with its loan, payment, taxes, insurance and rent. Lenders use it to verify reserves and, on conventional loans, to count financed properties.

A tax-deferred swap of one investment property for another under IRS rules, with strict identification and closing deadlines. A CPA question first — but Tiaira has closed on the financing side of them, and the timeline matters.