Earnest Money is an advance of a portion of the purchase price to indicate the ability of the buyer to carry out the contract.

Effective Gross Income (EGI) reflects the positive cash flow of the multifamily property. This number reflects the sum of the income minus the lost income - typically due to vacancy, concessions, and bad debt.

The Effective Rent is the actual rental rate achieved by the landlord after deducting any concessions from the base rental rate paid by a tenant, usually expressed as an average rate over the lease term.

An Employee Unit is a unit rented at a discounted rate to employees.

Any right to, or interest in, land that affects its value. Includes outstanding mortgage loans, unpaid taxes, easements, and deed restrictions.

The Equity Investment reflects the initial cost associated with purchasing an apartment community, including the down payment, closing costs, and fees. This investment may also be referred to as the initial cash outlay or the down payment.

Equity Multiplier (EM) demonstrates the rate of return based on the total net profit and the initial investment. This value is calculated by adding the total net profit and the gross cash flow divided by the equity investment. An equity multiple of 2X means that you are doubling your money throughout the project.

An Escalation is a provision in a lease that increases the cost of rent for the tenant.

The Exit Strategy is the last stage of the business plan defining the timeline and process to refinance or sell the property.