Administrative expenses, also known as general and administrative expenses, are the overhead costs incurred by a company to manage and support its operations. These expenses do not directly associate with the production of goods or services.
The cost of capital is the rate that must be paid to attract sufficient funds for an investment venture. It is crucial for decision-making in finance, reflecting the opportunity cost of using funds over some alternatives.
Debt is an obligation that requires one party, the borrower or debtor, to pay money or other agreed-upon value to another party, the lender or creditor.
Illiquidity refers to the inability to quickly convert an asset into cash without a significant loss in value. Real estate is considered an illiquid investment because of the time, effort, and costs required to sell properties.
A liquid asset is a property that can be converted to cash quickly and with minimal loss of value. Liquid assets provide the ability to raise cash for financial needs such as down payments for real estate.
A loan servicer is a company responsible for collecting and managing loan payments, managing escrow accounts, and handling other administrative aspects of a loan portfolio.
Milking a project, also known as bleeding a project, refers to the extraction of financial resources or benefits from a real estate project without reinvesting or contributing towards its development and sustainability.
The reinvestment rate is the interest rate an investor is assumed to be able to earn on intermediate cash flows in the projection of a terminal value.
