Wholesaling real estate glossary: every term you'll hear on a call

Deal math

• ARV — After-Repair Value. Retail resale value once renovated.
• MAO — Maximum Allowable Offer. (ARV × margin) − repairs − fee.
• Spread — the gap between contract price and what a buyer will pay.
• Comps — recently sold comparable properties used to set ARV.
• PPSF — price per square foot.
• Holding costs — taxes, insurance, utilities and interest while a flipper owns it.
• 70% rule — offer no more than 70% of ARV minus repairs.
• Cap rate / cash-on-cash — rental buyer return metrics.

Contract and closing

• Assignment — transferring your purchase contract to another buyer for a fee.
• Assignment fee — what you are paid to assign it.
• Double close — two back-to-back closings; hides your spread, costs two sets of fees.
• EMD — earnest money deposit.
• POF — proof of funds.
• Equitable interest — the ownership interest a signed contract gives you; the legal basis for wholesaling.
• Inspection / due-diligence period — your window to cancel.
• Title company / closing attorney — handles escrow, title search and disbursement.
• HUD-1 / ALTA settlement statement — the closing document showing your fee.
• Novation — replacing the original contract with a new one between the seller and end buyer.
• Subject-to — taking title while the seller's existing mortgage stays in place.
• Seller finance — the seller acts as the lender.

Leads and distress

• Buy box — your written criteria for the deals you want.
• Off-market — not listed on the MLS.
• Distressed — the property, the owner's finances, or both.
• Lis pendens — recorded notice of a pending lawsuit affecting title.
• NOD — Notice of Default, the first step in a non-judicial foreclosure.
• REO — Real Estate Owned; the bank took it back.
• Probate — court process distributing a deceased owner's estate.
• Absentee owner — mailing address differs from the property address.
• Tax delinquent — behind on property taxes.
• Code violation — cited by the city for property condition.
• Vacant — unoccupied, often USPS-flagged.
• Driving for dollars — physically scouting distressed houses.
• Skip trace — finding an owner's phone numbers and emails.
• DNC / TCPA — Do Not Call registry and the federal statute governing calls and texts.

Operations

• Acquisitions — getting properties under contract.
• Dispo — disposition; selling the contract to a buyer.
• Cash buyers list — your vetted list of end buyers.
• JV — joint venture between two investors on one deal.
• CRM — where every lead, call and follow-up lives.
• KPI — conversations, offers, contracts and closings per week.
• Cold call / warm follow-up — outbound and the money-making second, third and eighth touch.