Real estate equity is the ownership interest in a property. Typically, a property is purchased with a mortgage loan at a specified loan-to-value ratio (LTV).
Equity = Market Value - Loan Value
For example, if you own a property that, based on comps or an appraisal is worth $100,000, but you have a $75,000 mortgage loan, then your equity is $25,000.
$25,000 = $100,000 - $75,000
AVM stands for Automated Valuation Model, a proprietary algorithm used by iBuyers such as Offerpad, Opendoor, Zillow Offers and RedfinNow.
iBuying is short for "instant buying" and is a term used in the real estate industry for fast cash offers for your house.
Debt Service Coverage Ratio ("DSCR") = NOI ÷ (Mortgage + Taxes + Insurance). Learn how to calculate DSCR.