Cash Flow
Amount of money a building generates after debt service.
Debt Service Coverage Ratio (DSCR)
This is the Net operating income divided by the debt service (typically we are looking for a minimum of 1.20). This tells if the cash flow can adequately service the debt.
Income /Expense Statement
This gives a detailed account of all income, rents and other income, as well as all of the expenses associated with the property.
Lockout
A lockout is simply a specified period of time during which prepayments are prohibited. For example a typical loan with a balloon in ten years may have a lockout that expires in 3 years. Any prepayments made will not decrease the amount of interest due during the lockout period.
Mixed Use
A building that has more than 1 use. Usually residential units and then a retail, office or industrial use with in the same structure.
Multi Family
A building designated to house more than four families (more than four units).
Net Operating Income (NOI)
This is the income of the property minus the expenses.
Rent Roll
This is a spread sheet describing the leases and occupancy of a building. It tells the tenant name, lease start date, lease end date, # of units, square footage, amount of rent and how long each tenant has been there.
For many more commercial lending definitions, check out the Lending Apps glossary here.
Cash Flow