Property fundamentals
Principal Paydown
The portion of each mortgage payment that reduces the loan balance rather than paying interest.
Why Principal Paydown matters
Principal paydown is real wealth building — your tenant retires your loan — but it never shows up in cash flow. On a typical 30-year mortgage, year 1 is ~80% interest / 20% principal; year 25 is the inverse.
How to check Principal Paydown before you rely on it
Read it from the amortization schedule for the actual loan terms, because the split between interest and principal depends on the rate, the term, and the year. Check how much of the first year's payments reduce the balance, and note that it is small early in the loan. Count the paydown in the total return, but never in the cash flow: the tenant's rent retires the loan, and that equity is only available when you sell or refinance.
Related terms
Loan Term
Years over which the loan amortizes. 30-year fixed is the default; 15-year fixed reduces total inter…
Interest Rate
Annual mortgage rate. Pricing varies by occupancy, program, borrower, property, leverage, points, le…
LTV (Loan-to-Value)
Loan amount divided by the lender's eligible value basis. Investment-property cash-out limits vary b…
Equity Multiple
Total cash returned (cash flow + net sale proceeds) ÷ total cash invested. 2.0× means you doubled yo…
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Where Principal Paydown shows up in TrueCap
Property fundamentals are the facts you enter or confirm about the building itself — price, units, bedrooms, square footage — and the analyzer keeps them separate from assumptions. They decide which benchmarks apply (a 3-bedroom rent benchmark, for example) and appear at the top of every results view and memo so the reader knows exactly what was analyzed.