Flip and Danny run through 41 acronyms used in multifamily real estate and syndications, from AUM and CapEx to IRR and DSCR. A quick decoder for the industry shorthand you'll hear in deals.
Hey, everybody. Flip and Danny here, founders of the Freedom Real Estate Group family of companies. And welcome to another episode of our.
Podcast, which is called Freedom through Passive Income.
That's right. Now, today's episode. I like this one. This is going to be a good one. I'm going to learn today. This is called the common acronyms when investing in real estate syndications. And this isn't just real estate syndication. This is real estate in general, Real estate, multifamily real estate syndications. It's a lot of them. Yes. And I brought it up on a recent episode. And so you thought this would be great. And there's 39.
Actually, there's, I think 41.
41, yeah, there's 41. And another reason why we're going to do this. You have a cute little story.
Yeah. So when we first started learning about multifamily and syndications and all of this stuff, one of the things that we were reading said, please make sure that you ask for these things. And it was a T12, RR and OM. I was able to figure out. Yeah, the OM. I was able to figure out what the T12 was. It took me a little while to figure out the RR stands for because a lot of people use that acronym. I could not find OM anywhere. Was like, what is that? So finally somebody told me what it was. So we just thought this would be a useful episode for those of you who are learning about multifamily and syndications even from us. When we say an acronym, you'll understand what it means if you listen to this episode. Now, we're not going through definitions that would take too long because we do have 41 that are here and they're so commonly used. We decided just to stick them in here and we'd go through them real quick within our, what, eight minute episodes that we're trying to achieve. Okay, let's get started, Mr. Flipper.
I still call it an OM.
Anyway, all right, first one, AUM assets under management. Next one, CapEx capital expenditures.
The DSCR debt service coverage ratio.
The DM deferred maintenance, DD, due diligence. Yes, of course, the EGI, effective gross income. Now the EM, it could be equity multiple.
It also could be earnest money.
And then EUM equity under management.
There you go. And now we just had an episode on these two.
GP and lp, General partner or limited partner. And the gpi, Gross potential income, which is not the gpr, which is gross potential rent.
There you go.
GRM the Grim, that is gross rent multiple.
There you go.
So just so you guys know we're going through this and I didn't type out what these are. I wrote them down.
These are just initials.
So I'm just sitting here going, I hope I have this right. Okay, keep going.
Sorry. Hud.
That is a housing. No, Department of Housing and Urban Development.
That's right. And not to be confused with the horrible movie from the 80s called Chud.
Oh, dear.
Which is the Cannibalistic Humanoid Underground Dwellers. Anyway, see, I know my initials. I.O.
Interest only.
I.R.R.
Internal Rate of Return.
J.V.
Joint Venture.
K.P.
Key Principal Loi.
Letter of Intent.
LTC Loan to Cost. LTV Loan to Value.
I like this one just because I like to say it.
Libor, London Interbank Offered Rate.
I believe that says ltl.
Yeah, sorry about my handwriting. Last to Lease.
Right.
And msa, Metropolitan Statistical Area, which means around the city.
Noi.
Thank you. Net Operating Income.
Here it is.
OM Stands for Offering Memorandum.
Pfs, Personal Financial Statement.
Ooh. The pref.
That stands for Preferred.
Pref. Preferred. These people are so fast that they have to just get rid of half the letters in the word.
Yeah, so that's not really an acronym, but people call it. It's an 8 pref, or it's a 10 pref. And people go, pref.
Ppm.
Private placement memorandum.
Oh, the P and L. Profit and Loss.
And you referred to this a little bit ago in the story, the T12.
Yeah, T12. And T3 is a trailing twelve or a trailer length three. And I won't define it because I said I wasn't gonna.
I thought it was a device to measure things.
PoF, proof of funds, PSA, purchase, sale and Agreement.
And then this is the funniest thing, because the first time somebody said this, I started laughing because I didn't know what it was.
RUBS Ration Utility Billing System. I didn't know what it was when I first heard it either.
Oh, here it is.
Rr Rhett Roll.
Roe.
Return on Investment. Sorry, you said roe. So Return on Equity.
Yes.
And ROI is Return on investment.
Oh, and then here's a good one. We did this one in one of our episodes.
The sec, Security Exchange Commission.
Not to be confused with the Southeastern Conference.
Thank you.
You're welcome.
Thank you very much. I'm not the only one. The sdira.
Self Directed Individual Retirement Account.
And last but not least, the Essay Subscription Agreement. So one of these days we'll do a definition on all of these, but when you get. There was one time we got an email and it had half of these acronyms in One sentence. And I just. I walked into Danny's office and I'm like, can you translate this for me? I don't even. This. You might as well put this in hieroglyphics. I don't even understand any of this.
He might be exaggerating a little bit that half of these were in one sentence, but he is right. Many times when you're going back and forth with people in chat forums and email and text, everybody's using shorthand, so.
They left some letters out here.
It is really important to know and understand what these stand for because the definition is always something that you can learn and understand. But if you don't know what they stand for, you would be like us going, what is an om? And we went crazy for a little bit trying to figure it out.
It's an arm. It's okay. Well, we do like to keep these as short as sweet and possible. But make sure. If you're watching out there on YouTube, make sure you hit the subscribe button. If you're watching on Facebook, make sure you're joining our group, which is facebook.com.
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There you go. Make sure you hit the like button, the love button. Comment. Tell us how we're doing. Let us know if you have any questions. But make sure you interact with us and get into the groups and talk to them and talk to the whole gang in the group as well. But again, we like to keep these as short as possible, and we always.
Like to end with invest smart, live happy.
Bye, everybody.
I'm the world's okay.
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