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Real Estate Dictionary

What is the Difference Between a Lien Theory and Title Theory State?

In lien theory states, the borrower holds title and foreclosure requires a judicial process, while in title theory states, the lender (or trustee) holds title until the loan is paid off, allowing for faster, non-judicial foreclosures.

March 4, 2025

Is Texas a Lien Theory State?

Yes, Texas is a title theory state, not a lien theory state. In a title theory state, the borrower (mortgagor) gives legal title to the lender (mortgagee) or a trustee through a deed of trust until the loan is paid off.

March 4, 2025

What is WALT in Real Estate and How is it Calculated?

WALT (Weighted Average Lease Term) in real estate measures the average remaining lease duration of tenants, weighted by leased area or rental income, and is calculated as the sum of (lease term × weight) divided by the total weight, helping assess income stability and lease rollover risk.

March 4, 2025

What is a Future Value Factor in Real Estate Financial Modeling?

A Future Value Factor (FVF) in real estate financial modeling is a multiplier, calculated as ( 1 + 𝑟 ) 𝑛 (1+r) n, used to project future cash flows or property values by applying compound growth over time.

March 4, 2025

What is a Catch-up in Real Estate Financial Modeling?

A catch-up is a provision in a waterfall model that allows the sponsor (GP) to receive a larger share of profits after investors (LPs) achieve their preferred return, ensuring the GP is fully compensated for their promote before standard profit splits begin.

March 4, 2025

What is a Clawback in Real Estate Financial Modeling?

A clawback in real estate financial modeling is a provision that allows investors to recover previously distributed profits or fees if financial performance targets aren’t met, ensuring fair profit-sharing and sponsor alignment.

March 4, 2025

What is a PV Factor?

A PV Factor is a discounting factor used to determine the present value of future cash flows by accounting for the time value of money. See how it's calculated below.

March 4, 2025

What is Adventures in CRE?

Adventures in CRE (A.CRE) is an educational platform offering commercial real estate financial modeling resources, career insights, and industry training, including Excel models, tutorials, and a structured learning program.

March 4, 2025

What is an Interim Loan in Real Estate?

An interim loan is a short-term, high-interest loan used to bridge financing gaps, commonly for construction, acquisitions, or transitioning to permanent financing.

March 4, 2025

What is the Make Ready Process in Multifamily Real Estate?

The make-ready process in multifamily real estate involves inspecting, repairing, cleaning, and preparing a vacant unit to ensure it is move-in ready for the next tenant, minimizing downtime and maintaining property standards.

February 25, 2025
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