The terms every Central Arkansas real estate investor should know, defined in operator language, not textbook abstractions. Built from running 150+ rental units, dozens of build-to-rent projects, and cash transactions every month across Little Rock, North Little Rock, Sherwood, Jacksonville, Maumelle, Conway, Cabot, Benton, Bryant, and Alexander.

Returns & Yield Metrics

Cap Rate (Capitalization Rate): NOI ÷ purchase price. Central Arkansas stabilized rentals trade at 5.5%–8%; value-add 8%–10%+. Read about cap rates by submarket.

NOI (Net Operating Income): Gross rents minus operating expenses (taxes, insurance, management, maintenance, vacancy, utilities). Does not include debt service.

Cash-on-Cash Return: Annual cash flow ÷ total cash invested. The metric that actually matters for leveraged returns.

GRM (Gross Rent Multiplier): Purchase price ÷ annual gross rents. Quick screen. Central Arkansas SFRs typically 8–12x.

IRR (Internal Rate of Return): Time-weighted return on cash flows + sale proceeds. The honest long-term measure.

DSCR (Debt Service Coverage Ratio): Gross rents ÷ PITI. 1.0 minimum for most loans; 1.20–1.25 for best pricing. Read the DSCR vs hard money playbook.

Financing

LTV (Loan-to-Value): Loan amount ÷ property value. Conventional rental 75%–80%; DSCR 75%–80%; hard money 70%–85% with rehab.

ARV (After Repair Value): Projected value once rehab is complete. The basis for hard money LTV calculations.

BRRRR: Buy, Rehab, Rent, Refinance, Repeat, the operator playbook for scaling with limited capital.

Hard Money Loan: Short-term, asset-based financing for buy + rehab. 10%–13% rate, 2–4 points, 6–18 month term.

DSCR Loan: Long-term rental loan qualified on property cash flow, not borrower income.

Points: Prepaid interest at close. 1 point = 1% of loan amount.

Seasoning: Time you must hold a property before refinancing. Varies 0–12 months by lender.

Tax & Legal

1031 Exchange: IRS code allowing deferral of capital gains by exchanging investment property for like-kind. 45-day ID, 180-day close. Read the 1031 playbook.

Cost Segregation: Engineering study reclassifying property components into shorter depreciation lives. Read about cost seg + Arkansas tax strategies.

Depreciation: Non-cash deduction. Residential rentals depreciate over 27.5 years straight-line.

REPS (Real Estate Professional Status): IRS designation that unlocks unlimited passive loss offset against active income. 750+ hours/year material participation.

QBI Deduction (199A): 20% pass-through deduction for qualifying rental businesses.

STR Loophole: Short-term rentals (≤7-day average stay) treated as non-passive, losses can offset W-2 income with material participation.

LLC (Limited Liability Company): Liability separation structure. Pass-through tax treatment. Read the Arkansas LLC playbook.

Operations

Turn: The make-ready process between tenants. Our target: 10 days or less. Read the 10-day turn playbook.

Vacancy Rate: Percentage of time a unit sits empty. Our portfolio: under 5%. Industry average closer to 8%.

Occupancy Rate: 1 – vacancy. Our target and held standard: 95%+.

Days Vacant: Average days a unit remains empty between leases. Our target: under 30.

Section 8 / HCV: Federal Housing Choice Voucher program. Read the honest Section 8 playbook.

Unlawful Detainer: Arkansas civil eviction process. 3–6 weeks contested. Read how to evict in Arkansas.

Acquisition & Sale

Closing Costs: Buyer 2%–5% of price; seller 6%–8% (mostly commission). Read Arkansas closing costs breakdown.

Transfer Tax (Arkansas): $3.30 per $1,000 of consideration. Customarily seller-paid.

Earnest Money: Buyer’s good-faith deposit. Typically 1%–2% in Central Arkansas.

Cash for Houses: Off-market cash offer process. Read how our cash offer process works.

Wholesaling: Contracting a property and assigning the contract to an end buyer for a fee. Legal in Arkansas with proper disclosure.

Property Types

SFR (Single-Family Rental): One-unit detached home rented to one household.

BTR (Build-to-Rent): Purpose-built new construction designed to be rented. Read about build-to-rent in Central Arkansas.

Duplex: Two attached units, separate entries. Our portfolio sweet spot.

Small Multifamily: 2–4 unit residential property. Conventional residential financing eligible.

Common Acronyms

PITI: Principal, Interest, Taxes, Insurance, the full monthly housing payment.

HOA: Homeowners Association.

CO: Certificate of Occupancy.

RTO: Rent-to-Own.

FMV: Fair Market Value.

Pro Forma: Projected financials for an investment property, typically year-1 stabilized.

Want any of these terms applied to a specific deal? Call Chase at 501-650-5137 or contact us through Contact.

Additional Operator Terms (2026)

NOI (Net Operating Income): Effective Gross Income minus Operating Expenses. The single most important number in real estate underwriting. Drives cap rate, valuation, and debt service.
DSCR (Debt Service Coverage Ratio): NOI divided by annual debt service. Lenders typically require 1.20–1.25x minimum. Operators stress test at 1.10x.
CapEx (Capital Expenditure): Spending on long-lived asset components, roof, HVAC, water heater, exterior. Distinct from R&M (repairs and maintenance), which expenses immediately.
EGI (Effective Gross Income): Gross Scheduled Rent minus vacancy and credit loss. The realistic top-line revenue.
GSR (Gross Scheduled Rent): Sum of monthly market rent × 12 across all units, assuming 100% occupancy.
Cap Rate (Capitalization Rate): NOI divided by purchase price. A market valuation metric. Lower cap = higher valuation; higher cap = better cash-on-cash all else equal.
Cash-on-Cash Return: Annual pre-tax cash flow divided by total cash invested. The leveraged equivalent of cap rate.
LTV (Loan-to-Value): Loan amount divided by appraised value or purchase price. 70–75% is typical for investment property in Arkansas.
HAP Contract (Housing Assistance Payments): The contract between landlord and housing authority for Section 8 tenants. Governs the voucher portion of rent.
HQS Inspection (Housing Quality Standards): The Section 8 inspection performed by the housing authority at lease-up and annually.
Make-Ready: The process of turning a vacant unit from move-out condition to showing-ready. Includes cleaning, painting, repairs, and any flooring/fixture replacement.
Turn Time: Days from key return by departing tenant to listing as showing-ready. Operator benchmark: 10 days or less.
Days-Vacant: Days from listing as showing-ready to new tenant moving in. Operator benchmark: 30 days or less.
BRRRR: Buy, Rehab, Rent, Refinance, Repeat. An investment strategy of forcing equity through rehab, refinancing out, and redeploying capital.
BTR (Build-to-Rent): New construction built for the rental market rather than resale. Increasingly common in Central Arkansas, particularly Conway and Maumelle.
Class A / B / C: Informal property classification. Class A = newer, premium finishes, top market rents. Class B = stable, older but well-maintained, mid-market rents. Class C = older, value-add potential, lower rents.
Renewal Rate: Percentage of tenants who renew at lease end. Higher = better operations. Operator benchmark: 60–70%+.
Eviction (Unlawful Detainer): The civil court process for removing a non-paying or breach tenant in Arkansas. Distinct from the criminal eviction statute.
Pro Forma: A forward-looking projection of a property’s financials. Should always be stress tested before relying on it.
Stabilized Property: A property at full occupancy with market rents and minimal deferred maintenance. The baseline for cap rate comparison.

Investor Glossary: Central Arkansas Real Estate Terms Defined