Glossary

Capital Appreciation

Capital appreciation is the rise in value of an asset based on a rise in market price. It is the current value of an investment minus the purchase price. 

Capital Call

Capital call is the legal right of an investment firm to demand a portion of the money promised to it by an investor. 

Capital Gain

Capital gain is the profit from the sale of a property or investment. 

Capital Stack

Capital stack is the combination of all types of funding that went into the purchase and improvement of a specific project. 

Capitalization Rate or Cap Rate

Capitalization rate is the ratio of net operating income (NOI) to property asset value. For example, if a property was valued at $10 million and generated an NOI of $1 million, then the cap rate would be 10%. 

Cash Flow

Cash flow is the movement of money into or out of a business. 

Cash on Cash Return

Cash on cash return is often used in real estate transactions. This rate is determined by dividing the annual dollar income by the total dollar investment. 

Charge Off

Charge off is the declaration by a creditor that a debt is unlikely to be collected. This occurs when a consumer becomes severely delinquent on a debt, traditionally after six months without payment. 

Closing

Closing is the final step in executing a real estate transaction. At closing, all agreements are finalized, documents are signed, funds go to the seller, and the title goes to the buyer. 

Commercial Property

Commercial property is real estate that is used for business activities. 

Common Equity

Common equity is the amount that all common shareholders have invested in a company. This includes the value of common shares, retained earnings, and additional paid-in capital. 

Comparative Market Analysis

A Comparative market analysis is an evaluation of similar, recently sold properties. Comparative Market Analysis is used to determine the current market value of a property. 

Compound Interest

Compound interest is the interest added to the principal so that the added interest also earns interest from then on. 

Corporate Guarantee

A corporate guarantee is a guarantee in which a corporation agrees to fulfill the duties of a debtor to a lender in the event that the debtor fails to fulfill the terms of the debtor-lender contract. 

Credit Report

A credit report details a person's financial history, specifically pertaining to their ability to repay borrowed money. 

Credit Score

A credit score is a number representing a person's creditworthiness, and is used by lenders to determine the probability that a person will repay their debts. 

Crowdfinancing

Crowdfinancing is crowdfunding for investments. It is the practice of funding an investment by raising many small amounts of money from multiple people or companies. 

Crowdfunding

Crowdfunding is the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the internet.