Net Operating Income (NOI) - It is the annual income generated  by an income property. In this calcuation the DEBT service, TAXES and Depreciation are not included.

Loan to Value Ratio (LTV) - It is the ratio of the loan amount borrowed in relation to the appraised value of the property.  The loan to value ratio is expressed as: LTV= Loan Amount / Property Value.

Debt Coverage Ratio (DCR) -  It is the ratio of the NOI to the Annual Debt Service (ADS).  The DCR represents the lender’s “margin of safety.”  DCS= NOI/Annual Debt Service.

Direct Capitalization Method -  Determines the vale of the property by converting a one-year stabilized NOI based on a capitalization rate (CAP). The value is obtained by dividing the NOI by the capitalization rate (CAP).Value= NOI / CAP

Download Complete Concept List