---
id: "prereq-real-estate-finance-terms"
type: "prereq"
source_timestamps: ["00:06:30", "00:10:45", "00:20:00"]
tags: ["finance", "vocabulary"]
related: ["concept-hard-vs-soft-costs", "concept-seller-financing"]
reason: "Required to understand the underwriting math and profitability metrics discussed for the condo developments."
sources: ["jayroberts"]
sourceVaultSlug: "jay-roberts-florida-condo-development-2026Jun25"
originDay: 4
---
# Real Estate Finance Terminology

## Prerequisite: Real Estate Finance Terminology

**Why it matters:** Required to understand the underwriting math and profitability metrics discussed for the condo developments.

### Required Vocabulary

The conversation assumes the listener already understands standard commercial real estate terminology:

- **Hard costs** — physical building materials/labor (see [[concept-hard-vs-soft-costs]])
- **Soft costs** — fees, design, financing, land
- **Cap rates** — capitalization rates used to value income-producing property (e.g., the 5.5 cap rate used to value Prosper's office suites — see [[concept-office-suite-condos]])
- **Equity vs. debt capital stacks** — the layered ownership / financing structure of a deal
- **ROI / ROE** — return on invested equity, the key metric in [[claim-florida-roi-advantage]]
- **Surety bond** — see [[concept-construction-bond]]
- **Seller financing** — see [[concept-seller-financing]]

### Suggested Learning Path

- Investopedia entries on cap rates, ROE, and capital stack
- *The Real Estate Game* by William Poorvu (basic development finance)
- Any institutional real estate underwriting primer