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Glossary

Common Real Estate Terms

Learn the Lingo of Multifamily Investing – we are here to help!

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There are currently 8 names in this directory beginning with the letter B.
Bad Debt
Bad Debt reflects the sum of past-due money a tenant owes after they move out.
Balance
The amount left over after subtracting the amount owed (on a loan) or the amount remaining already paid (in an account).
Base Rent
A Base Rent is the set amount used as the minimum rent in a business plan.
Base Year
The Base Year refers to the expenses and taxes at the point of purchase. Once these expenses are known, the unit leases increase annually to reflect expense increases above the base year figures.
Breakeven Occupancy
Breakeven Occupancy is the rate need to cover all of the apartment community expenses. This rate is calculated by dividing the operating expenses and debt service by the gross potential income.
Bridge Loan
A Bridge Loan is a loan used until a company secures permanent financing. Bridge loans are short-term, typically six months to three years, with the option to purchase an additional six months to two years. Bridge Loans commonly have a higher interest rate and are almost exclusively interest-only. Bridge Loans are ideal choices for apartment financing. They are also referred to by other names, such as swing loans, interim financing, or gap financing.
Broker
A Broker is a commercial real estate agent who represents a party to facilitate buying, selling, or leasing a commercial property.
Building Classifications
Building Classifications typically refer to Class "A", "B", "C", and "D" properties. The rating assigned to a building is subjective and relative to the sub-market. Class "A" properties are commonly newer buildings with a higher level of construction, higher-finish levels, and located in prime locations. Age, location, amenities, and construction of the building impact its classification ranking. A Class "A" building in one sub-market may rank lower in a different sub-market due to the other competition in that sub-market.
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