Glossary — the technical terms, in plain English
Every real estate calculator on the internet assumes you know what "cap rate" means. Here's the version that doesn't.
1031 Exchange
A US tax provision (IRC §1031) letting you defer capital gains tax when you sell an investment property and reinvest in another "like-kind" property. Strict timelines: identify replacement within 45 days, close within 180.
Tax13-week Cash Forecast
Weekly receipts, disbursements and ending cash — the crisis instrument.
Hospitality28/36 Rule
Lender guideline: housing payment shouldn't exceed 28% of gross monthly income (front-end ratio); total debt payments shouldn't exceed 36% (back-end ratio). Some lenders stretch to 35/43.
MortgageAdjusted Basis
What you paid for a property + capital improvements − accumulated depreciation. The number subtracted from sale price to compute gain.
TaxADR
Average daily rate on occupied rooms.
HospitalityADR Index (ARI)
Subject ADR against the comp set’s — the rate half of the index pair.
HospitalityAllocation (Purchase Price)
The negotiated split of one price among realty, FF&E and business value — four bills hang from it.
HospitalityAllocator Stance
Funding and governing a hotel allocation without operating it directly — one of three postures a family can take, alongside capital and operations.
GovernanceAmortization
The way a mortgage payment is split between principal and interest. Early in the loan, most goes to interest; over time, more goes to principal.
MortgageAppreciation
Increase in property value over time. Driven by inflation, supply constraints, and local demand.
InvestingARM (Adjustable-Rate Mortgage)
Mortgage with a fixed initial rate (e.g., 5 or 7 years) that then adjusts annually based on a benchmark rate. Lower starting rate, higher long-term risk.
MortgageAttrition
A group’s shortfall against its contracted block, and the clause that prices it.
HospitalityAttrition Clause
Group-contract charge for block rooms not used.
HospitalityBad-Boy Carve-Outs
The acts — fraud, waste, unauthorized transfer, voluntary bankruptcy — that convert nonrecourse debt to personal liability.
HospitalityBalloon
Principal due at maturity — the checkpoint tested a decade early.
HospitalityBand
The written ceiling on a class or position, measured on committed equity.
GovernanceBase Fee
The manager’s percentage of total revenue.
HospitalityBasis
Your cost in a property for tax purposes — generally what you paid plus capital improvements. Used to compute capital gain on sale.
TaxBonus Depreciation
First-year expensing of qualifying short-life property; needs no study.
HospitalityBooking Window
How far ahead a segment books — the calendar dimension pricing works inside.
HospitalityBrand Standards
The manual of requirements a flag enforces through QA and the PIP cycle.
HospitalityBreakeven Occupancy
Occupancy at current ADR where cash after debt service is zero.
HospitalityBRRRR
Buy, Rehab, Rent, Refinance, Repeat. A strategy of buying distressed property, fixing it, renting it, then refinancing to pull equity out for the next deal.
StrategyBurn Ceiling
The rule capping any deal’s stress-year cash need against family liquidity.
GovernanceCap Rate (Capitalization Rate)
Net Operating Income ÷ Property Price. The yield a property would produce if you paid all cash. Lower cap rate = "more expensive" property; higher = "cheaper."
InvestingCapex
Capital expenditure — the component calendar’s spending, distinct from repairs.
HospitalityCapital Gains
Profit on sale of an asset above your basis. Long-term (held >1 yr) is taxed at preferential rates (0%/15%/20% federal); short-term is ordinary income.
TaxCarve-outs
The bad-boy acts that convert nonrecourse debt to recourse; policy forbids widening them.
GovernanceCase Goods
Furniture and millwork — the twelve-year line on the component calendar.
HospitalityCash Sweep
Lender control of revenues below a covenant trigger.
HospitalityCash-on-Cash Return
Annual cash flow ÷ cash invested. The return on the cash you actually put in (down payment + closing + reserves), not the property value.
InvestingChain Scale
Benchmarking tiers grouping brands by rate positioning.
HospitalityChargeback
A card charge reversed through the processor — tracked where processing costs live.
HospitalityCity Ledger
Direct-bill receivables after checkout — aged monthly.
HospitalityClosing Costs
Fees paid at the close of a real estate transaction — title insurance, escrow, attorney, transfer taxes, lender fees. Typically 2–5% of the sale price for buyers, 1–3% for sellers (excluding commission).
TransactionClosing Statement
The settlement sheet of prorations and credits beside the price.
HospitalityCMA (Comparative Market Analysis)
A pricing study that estimates a home's value by comparing recent sales of similar nearby properties. Real estate agents prepare CMAs to suggest list prices.
TransactionCo-investment
Family capital beside a partner’s in one deal, at negotiated governance rights.
GovernanceComfort Letter
Lender–brand agreement preserving the flag through foreclosure.
HospitalityCommittee Memo
The fixed-format case for a deal — nine rows of engine-derived evidence, filled and voted the same way every time.
GovernanceComp Set
The competitors performance is indexed against — chosen, and gameable.
HospitalityCompression Night
A night the market sells out — where displacement and overbooking earn.
HospitalityConforming Loan
A mortgage that meets Fannie Mae / Freddie Mac size and underwriting limits — the most common type. Above the limit is a "jumbo" loan.
MortgageConsent Calendar
Routine within-policy items approved en bloc unless any member pulls one; nothing conflicted rides it.
GovernanceContract Labor
Agency staffing priced as the option it is — premium per hour for shedding the fixed schedule.
HospitalityCost Segregation
A study that reclassifies property components into shorter depreciation categories (5-, 7-, 15-year instead of 27.5- or 39-year). Accelerates tax deductions.
TaxCovenant
The loan’s standing tests — DSCR, escrows, reporting.
HospitalityCPOR
Rooms cost per occupied room, built from minutes and wages.
HospitalityCross-Default
One loan’s breach triggering another’s — the portfolio’s hidden coupling.
HospitalityCure Rights
The manager’s option to fix or pay before termination.
HospitalityCut-Off Date
When a group’s unsold rooms return to general inventory.
HospitalityDCF
Valuation from projected flows and an exit — the coherence check.
HospitalityDe-Flagging
Removing the brand at exit or repositioning — priced by the §14.3 algebra.
HospitalityDebt Service
The year’s principal and interest — the constant the §9.4 spine is measured against.
HospitalityDebt Yield
Earnings after reserve over loan balance — the sizing floor.
HospitalityDebt-to-Income Ratio (DTI)
Total monthly debt payments divided by gross monthly income. Lenders cap conforming loans around 43–50% DTI.
MortgageDelegation of Authority
The written map of who decides what, at which thresholds.
GovernanceDemand Generator
The named institutions that fill the market’s rooms — listed with expiry dates.
HospitalityDepreciation
A tax deduction allowing rental property owners to write off the building (not land) cost over 27.5 years (residential) or 39 years (commercial), even though the building isn't actually losing value.
TaxDepreciation Recapture
When you sell a depreciated property, the depreciation taken comes back as taxable income. The rate depends on what was depreciated: real property (§1250) is capped at 25% federal; personal property like FF&E (§1245) recaptures as ordinary income at your marginal rate, which is usually higher — the split that matters most on FF&E-heavy assets like hotels.
TaxDisplacement
Profit lost from guests a group block turns away.
HospitalityDissent File
A no-voter’s named concern with its observable and date, attached to the memo permanently.
GovernanceDrag (Computed)
Advertised deal return minus the family’s net on dated cash flows — the alignment test no adjective survives.
GovernanceDSCR
Earnings after reserve over annual debt service.
HospitalityDSCR Loan
Debt Service Coverage Ratio loan. Underwritten on the property's rental income vs. mortgage payment, not on borrower income. Used by serious investors.
MortgageEarnest Money
A deposit (typically 1–3% of price) the buyer puts up to show good faith. Held in escrow; applied to closing or forfeited if buyer backs out without cause.
TransactionEBITDA
GOP less fees and fixed charges, before the reserve.
HospitalityEquity
Property value minus what you owe on it. A $500K home with a $300K mortgage = $200K equity.
GeneralEscrow
A neutral third party that holds money or documents during a transaction. Also a monthly account where the lender holds property tax and insurance funds for you.
TransactionEstoppel
A counterparty’s signed statement of a contract’s status — collected in diligence.
HospitalityEWW
The USALI utilities schedule — energy, water and waste, shown with consumption metrics alongside cost.
HospitalityExchange (§1031)
Deferral by trading into replacement realty — the tax kept working.
HospitalityExtended Period of Indemnity
BI coverage past reopening, funding the ramp back to stabilized occupancy.
HospitalityFair Workweek
Predictive-scheduling law: posted schedules, predictability pay, rest between shifts.
HospitalityFences
Restrictions that discount a condition, never the public price.
HospitalityFF&E / OS&E
Furniture, fixtures and equipment; operating supplies.
HospitalityFHA Loan
Federal Housing Administration-insured mortgage. Allows 3.5% down with FICO 580+. Requires mortgage insurance for the life of the loan in most cases.
MortgageFICO Score
Your credit score, 300–850. Above 740 typically gets you the best mortgage rates; below 620 limits you to FHA/VA loans at higher rates.
CreditFlag
The brand licensed onto the building.
HospitalityFlow-Through / Flex
Share of a revenue change reaching GOP, up / down.
HospitalityFolio
The guest’s account of charges and taxes — where the trust-fund layers are born.
HospitalityForce Majeure
The contract clause excusing performance on defined catastrophes — read in group contracts and the HMA before the storm.
HospitalityFranchise Stack
Royalty plus program, distribution and loyalty, as one percentage of rooms revenue.
HospitalityFSBO (For Sale By Owner)
Selling without a listing agent. Saves the ~3% listing commission; typically nets 5–10% less on price for most sellers due to weaker negotiating leverage and limited buyer reach.
TransactionGDS
The agency networks behind corporate and travel-agent bookings.
HospitalityGeneral Manager
The hire that moves every line — chosen for numeracy, labor craft and retention evidence.
HospitalityGhost Assets
Disposed equipment still on the fixed-asset schedule, quietly taxed.
HospitalityGMP Contract
Construction pricing with a ceiling — the development discipline’s first protection.
HospitalityGoing Concern
Realty, FF&E and operating business sold as one.
HospitalityGOP / GOPPAR
Departmental profit less undistributed expenses; per available room.
HospitalityGroup Block
Rooms held under one contract at one rate — tested by displacement.
HospitalityGuest Ledger
Open in-house folios — purchased or prorated at closing.
HospitalityHELOC
Home Equity Line of Credit. Variable-rate revolving credit secured by your home equity. Useful for short-term flexible funding.
MortgageHMA
Hotel management agreement — base plus incentive over a priority.
HospitalityHouse Bank
The operating cash on property — counted and transferred at closing.
HospitalityHouse Hack
Buying a 2–4 unit property with owner-occupied financing (low down payment), living in one unit, renting the others.
StrategyImpact Study
The brand’s analysis of a new same-brand entrant near yours — demand it in writing.
HospitalityIn-Service Date
When an asset’s tax life begins — recorded per item on the fixed-asset schedule.
HospitalityIncentive Fee
The manager’s share of profit above the owner’s priority.
HospitalityIndependent Member
The non-family committee seat that chairs conflicted matters.
GovernanceInterest-Only
Debt without amortization — the quiet hero deleted, priced as risk transfer.
HospitalityIntervention Ladder
Questions → thresholds → cure → removal, each rung on paper.
GovernanceIPS
The committee’s memory written down calm — the written case, bands and standards a hotel allocation is held to.
GovernanceJumbo Loan
A mortgage above the conforming loan limit (~$806K in most US counties as of 2026, higher in expensive markets). Requires stronger credit and larger down payment.
MortgageKey
The industry’s unit of count — as in per-key price.
HospitalityKey Money
Operator or brand capital that amortizes over the term.
HospitalityKill File
Declined deals with the exhibit that stopped each — reread when familiar deals return wearing new prices.
GovernanceLegacy Exception
A beloved property held outside the bands, named as such in writing.
GovernanceLength of Stay
Nights per booking — a control lever on compressed dates and a fence dimension.
HospitalityLinkage Share
The revenue share effectively priced in dollars — a managed policy number, not a market fact.
GovernanceLiquidated Damages
The franchise exit’s pre-agreed price — a multiple of recent fees.
HospitalityLodging Tax
The guest-folio tax the owner collects in trust.
HospitalityLoss Carryforward
A paper loss stored against future income — how the passive wall pays late instead of never.
HospitalityLTV (Loan-to-Value)
Loan amount divided by property value. 80% LTV means you borrowed 80% and put 20% down. Higher LTV = more leverage = more risk.
MortgageMezzanine
Debt behind the mortgage, priced between debt and equity.
HospitalityMortgage Insurance (PMI / MIP)
Insurance protecting the lender if you default. Required when LTV exceeds 80%. Typically 0.5%–1.5% of the loan annually.
MortgageMortgagee Clause
The lender’s rights inside your insurance policy — visible at claim time.
HospitalityMPI (Occupancy Index)
Subject occupancy against the comp set’s — the volume half of the index pair.
HospitalityMPOR
Housekeeping minutes per room cleaned — CPOR’s largest input.
HospitalityMultifamily
Residential property with multiple units. 2–4 unit properties get residential financing; 5+ units are commercial.
Property typeNamed-Storm Deductible
A percentage of insured values, due as a check, per storm.
HospitalityNet ADR
The rate that survives the channel: ADR less commissions and acquisition costs, per door.
HospitalityNIIT (Net Investment Income Tax)
Additional 3.8% federal tax on investment income (including capital gains and rental income) for high earners — over $200K single, $250K joint.
TaxNo-Show
A confirmed guest who never arrives — the overbook engine’s fuel.
HospitalityNOI (Net Operating Income)
Gross rental income minus operating expenses (taxes, insurance, maintenance, vacancy, management) but before mortgage. The cash flow available to pay debt service and provide return.
InvestingNormalization
Restating a seller’s numbers to honest USALI economics.
HospitalityObserver Seat
Next-generation membership with voice and no vote — two years of memos against outcomes as tuition.
GovernanceOccupancy
Occupied over available room-nights — the ladder’s first rung, never read alone.
HospitalityOffering Memorandum
The seller’s curated case — ranked last in the document hierarchy, always.
HospitalityOpco / Propco
The employer entity leasing from the realty entity.
HospitalityOperating Partner
The specialist who runs hotels the family funds and governs.
GovernanceOpportunity Zone (QOZ)
A federally designated low-income census tract where investing capital gains in a Qualified Opportunity Fund earns major tax benefits. Made permanent by the OBBB Act of July 2025; new designations take effect Jan 1, 2027.
TaxOrigination Fee
Lender fee for processing the loan — typically 0.5–1% of loan amount. Folded into closing costs.
MortgageOTA
Third-party booking channels, priced at net ADR.
HospitalityOverbooking
Selling past capacity against expected no-shows — an expected-profit balance.
HospitalityOwner’s Priority
The hurdle ownership clears before incentive fees share success.
HospitalityPace
Bookings on the books for future dates versus prior years.
HospitalityPassive Activity
The §469 wall between property losses and other income — with a hotel exception.
HospitalityPerformance Test
The HMA’s two-pronged, curable termination standard.
HospitalityPersonal Guarantee
The owner’s balance sheet behind the debt — layer five of the waterfall.
HospitalityPickup
Bookings added for a future period since the last reading.
HospitalityPIP
The renovation a brand requires to grant or keep the flag.
HospitalityPipeline
Rooms under construction in the market — public, and read before trusting any index.
HospitalityPITI
Principal, Interest, Taxes, Insurance — the four components of your monthly housing payment. Add HOA and PMI if applicable.
MortgagePMS
The property management system — source of truth for occupancy, rate and folios.
HospitalityPoints
Upfront fee paid to lower your interest rate. One point = 1% of loan amount, typically buys 0.25% off the rate. Worth it if you'll keep the loan long enough to recoup.
MortgagePre-approval
A lender's conditional commitment to lend you up to a certain amount, based on verified income, credit, and assets. Stronger than "pre-qualification."
MortgagePredictability Pay
The premium fair-workweek laws attach to late schedule changes.
HospitalityPreferred Return
The LP’s accrual before the sponsor’s promote — read the compounding convention.
HospitalityPreventive Maintenance
The engineer’s rotation that carries components to full design life.
HospitalityPrice-to-Rent Ratio
Home price ÷ annual rent. Below 15 favors buying; above 20 favors renting; 15–20 is mixed. A market-level indicator.
InvestingPrincipal Residence Exclusion
IRC §121: up to $250K (single) / $500K (married) of gain on sale of primary residence is tax-free, if you've owned and lived there 2 of the past 5 years.
TaxPromote
The sponsor’s share of profit above preference and capital.
HospitalityProperty Manager
A firm or individual that handles tenant screening, rent collection, maintenance, and evictions for an owner. Standard fee: 8–12% of collected rent + leasing fee for new tenants.
OperationsProration
The closing statement’s split of taxes, deposits and the closing night.
HospitalityQBI (§199A)
The flow-through deduction — last in line after the shield.
HospitalityQOF (Qualified Opportunity Fund)
An investment vehicle that invests at least 90% of assets in property within designated Opportunity Zones. Hold 10+ years to get tax-free appreciation on the QOF itself.
TaxQuarterly Pack
The aggregated reporting stack the committee reads four times a year.
GovernanceRamp-Up
The sub-stabilized opening years, funded as capital.
HospitalityRate Architecture
The ladder of public, fenced and negotiated rates set in the far window.
HospitalityRate Integrity
Defending the public price so discounts die with their condition.
HospitalityRate Parity
Contractual equality of public rates across channels — fences are the lawful flex.
HospitalityRecourse / Carve-Outs
What the guarantee covers, and the bad-boy acts that void nonrecourse.
HospitalityRecusal
Standing aside from a vote one has an interest in, recorded in minutes.
GovernanceRefinance
Replacing your current mortgage with a new one — typically to lower the rate, change the term, or pull cash out. Worth doing when the new rate is at least 0.5–1 point lower and you'll keep the loan 18+ months.
MortgageReforecast
The operator’s rolling ninety-day P&L commitment — the budget measures the year, this manages it.
HospitalityREIT (Real Estate Investment Trust)
A publicly traded company that owns real estate. By law must distribute 90% of taxable income as dividends. Buy shares like stocks; instant liquid real estate exposure.
InvestingRelief Factor
The multiplier converting post-hours to people — vacations and weekends made visible.
HospitalityRemoval Rights
The negotiated power to replace a partner or manager for cause or performance.
GovernanceReplacement Reserve
The funded percentage that buys the component calendar.
HospitalityRevenue Management
The pricing discipline: pace, displacement, channels, fences, overbooking.
HospitalityReverse Brief
The family’s one-page answer to a counterparty’s diligence — capital character, governance interface, references offered.
GovernanceRevPAR
Occupancy times ADR — the industry’s pulse.
HospitalityRevPAR Index (RGI/MPI/ARI)
Property performance over comp-set performance, times 100.
HospitalityRRM
Price over rooms revenue — the screening multiple.
HospitalityRule of One
The family occupies each chair — capital, governance, operations — deliberately or not at all.
GovernanceSegmentation
Occupancy’s composition by demand family — the mix behind the number.
HospitalityShort-Term Rental (STR)
Vacation rental — Airbnb, VRBO. 1.5–3× the gross income of long-term rental but higher operating costs, vacancy, and regulatory risk.
StrategySNDA
Subordination and non-disturbance for the HMA at foreclosure.
HospitalitySoft Brand
Distribution-and-loyalty affiliation under your own name — a smaller stack needing a smaller lift.
HospitalitySoft Goods
Carpet, drapery, bedding — the six-year line that shows first.
HospitalitySponsor
The syndication’s organizer, paid in fees and promote.
HospitalitySTAR Report
The subscription benchmark against the comp set.
HospitalityStep-Up in Basis
When you die holding appreciated property, your heirs' basis becomes the fair market value at your death — the embedded capital gains disappear. Foundation of multigenerational real estate strategies.
TaxSTR Loophole
If you materially participate in your short-term rental (avg. stay ≤7 days, you do meaningful work), losses can offset W-2/active income — bypassing passive activity rules. Subject to specific tests.
TaxStress Test
Re-running the affordability math at a higher rate (e.g., +1–2% above current) to see if you could still cover the payment if rates rose.
MortgageStress Test (Family Balance-Sheet Level)
The recorded worst year read against family liquidity, not just the property.
GovernanceSyndication
A group investment in real estate where a "sponsor" finds, finances, and manages a property; "limited partners" provide capital. Typically restricted to accredited investors.
StrategyTerm Sheet
The lender’s outline of rate, covenants and guarantees — negotiated hardest at its quietest clause.
HospitalityTip Credit
The statutory offset of tips against minimum wage, with mandatory conditions.
HospitalityTitle Insurance
Insurance protecting against defects in the property's title (liens, prior claims, fraud). One-time premium at closing. Two policies: lender's and owner's.
TransactionTIV
Insured values — property plus time element — that percentage deductibles ride.
HospitalityTrailing Twelve
The last twelve months of operations — a story until normalized.
HospitalityTransfer Tax
The jurisdiction’s levy on conveyance — a seller-side closing line.
HospitalityTrapped Cash
Profits a route-home friction cannot yet move — tracked as its own asset class in the pack.
GovernanceTRevPAR
Total revenue per available room-night.
HospitalityTRS
The taxable subsidiary through which a REIT’s hotels are operated.
HospitalityTurnkey Rental
An already-renovated, already-tenanted rental property sold ready to operate. Typically out-of-state; managed by a partner property management company.
StrategyTurnover
Departures over headcount — the labor line’s hidden surcharge, priced per ten points.
HospitalityUSALI
The industry’s uniform accounting system, 12th Revised Edition.
HospitalityVA Loan
Mortgage backed by the US Department of Veterans Affairs. 0% down for eligible veterans, no PMI, competitive rates.
MortgageVacancy Allowance
A line in your rental underwriting that assumes the property will be empty some of the time. Standard: 5–10% of gross rent for long-term; 30–50% for short-term.
InvestingWalk
Relocating a confirmed guest on an oversold night — costed, and scripted in advance.
HospitalityWalk-Away Price
The number past which a buyer leaves — written before negotiation, honored during it.
HospitalityWar Chest
Twelve-plus months of stress burn held outside the deal; funded before distributions.
HospitalityWARN Act
Federal notice rules for mass employment loss — planned into every closing.
HospitalityWaterfall
The ordered rules splitting deal cash among preference, capital and promote.
HospitalityWorking Capital
Opening bank, inventories and ledgers — bought, counted and prorated at closing.
HospitalityXIRR
Return computed from dated cash flows rather than calendar-year periods — the more accurate IRR for real estate.
HospitalityYield Maintenance
Prepayment pricing that makes the lender whole on the remaining coupon — the exit door’s toll on fixed debt.
HospitalityYield on Cost
Stabilized earnings over total development cost.
HospitalityZestimate
Zillow's automated home value estimate. Useful as a starting point but documented to be off by 5–20% in many markets — never the only data point you should rely on for pricing.
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