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Tommy purchased a property based upon a 7% overall rate with a net income of $30,000, which included $10,000 of capital improvements. What is the indicated overall rate from this sale?
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Wrong!

A retail strip center sold at a 9% capitalization rate with financing being provided with an 75% loantovalue ratio and a debt coverage ratio of 1.25. What is the implied mortgage capitalization rate?
Correct!
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A property recently sold with an Io of $32,000. The land value is estimated at $65,000 and the current rate to the land is 9.5%. What is the property value if we assume that the building capitalization rate is 100 basis points higher than the land capitalization rate?
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What would property taxes be in this scenario? An office/warehouse sold for $2,000,000 based upon a market overall rate of 9.5% applied to Io, if net income before taxes (NIBT) is $240,000?
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A warehouse recently sold for $575,000 with an Io of $63,200. Let's assume the overall rate to the land is 9.2%. What is the indicated overall rate to the building?
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A warehouse recently sold for $575,000 with an Io of $63,200. Let's assume the overall rate to the land is 9.2%. Given a 21.22% landtovalue ratio, what is the capitalization rate of the building?
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A warehouse recently sold for $575,000 with an Io of $63,200. Let's assume the overall rate to the land is 9.2%.Given a 21.22% landtovalue ratio, what is the value of the land?
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What is the terminal cap rate?
NOI  $275,000
lo & Vo are increasing at 3% per year
Yo & Ycf = 12%
Holding Period is 5 years
NOI  $275,000
lo & Vo are increasing at 3% per year
Yo & Ycf = 12%
Holding Period is 5 years
Correct!
Wrong!

What sort of lease structure allows the owner to participate in the sales of the retail tenant?
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What happens to the mortgage constant for the following structures over time in an amortization schedule?
Rm = 9%, i = 10%
Rm = 9%, i = 10%
Correct!
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What happens to the mortgage constant for the following structures over time in an amortization schedule?
Rm = 11%, i = 10%
Rm = 11%, i = 10%
Correct!
Wrong!

What happens to the balance for the following structures over time in an amortization schedule?
Rm = 10%, i = 10%
Rm = 10%, i = 10%
Correct!
Wrong!

What happens to the balance for the following structures over time in an amortization
schedule?
Rm = 11%, i = 10%
schedule?
Rm = 11%, i = 10%
Correct!
Wrong!

What type of mortgage structure does this represent?
Rm = 9%, i = 10%
Rm = 9%, i = 10%
Correct!
Wrong!

What type of mortgage structure does this represent?
Rm = 11%, i = 10%
Rm = 11%, i = 10%
Correct!
Wrong!

What is the value of the part taken?
Correct!
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What is the recommendation for total compensation?
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What is the after value?
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A roadwidening project includes plans to take .53 acres of a 3.5 acre tract. The property is improved with a retail center with 38,115 square feet. The center is currently 95% occupied, but one tenant (5000 sf) already has decided to move out because the parking will be affected by the taking. The tenant would have renewed for 3 years at $1.00 psf per month. The adjacent landowner may be willing to sell .53 acres for $7.50 psf (market value is $4.50 psf).
The following assumptions apply.
(1) Land value before $3.00 psf
(2) Improvements before:
(a) Retail center  $1,325,000 (replacement cost = $1,750,000)
(b) Parking  $2.00 psf * 100,000 sf (replacement cost = $2.50 psf)
(c) Signage  $25,000 (replacement cost = $30,000)
(3) Taking:
(a) .53 acres of land
(b) Parking – 21,000 sf
(c) Signage – all
(4) The new sign permit is $4,000. New signage will cost $30,000 including the sign permit. The center would be significantly impacted without signage.
(5) The retail center will lose $5 psf in value because of parking, unless the adjacent owner sells the land.
(6) Given no land acquisition, a drive for new access will have to be constructed along the north side of the building because ingress will be changed. The drive would cost $20,000 and $5,000 in landscaping would be removed
(7) Similar properties are selling based upon a 15% overall yield.

Question 1:
What is the before value?
The following assumptions apply.
(1) Land value before $3.00 psf
(2) Improvements before:
(a) Retail center  $1,325,000 (replacement cost = $1,750,000)
(b) Parking  $2.00 psf * 100,000 sf (replacement cost = $2.50 psf)
(c) Signage  $25,000 (replacement cost = $30,000)
(3) Taking:
(a) .53 acres of land
(b) Parking – 21,000 sf
(c) Signage – all
(4) The new sign permit is $4,000. New signage will cost $30,000 including the sign permit. The center would be significantly impacted without signage.
(5) The retail center will lose $5 psf in value because of parking, unless the adjacent owner sells the land.
(6) Given no land acquisition, a drive for new access will have to be constructed along the north side of the building because ingress will be changed. The drive would cost $20,000 and $5,000 in landscaping would be removed
(7) Similar properties are selling based upon a 15% overall yield.

Question 1:
What is the before value?
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The Median is:
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The chances of obtaining a value between $80 and $120 for the above, if randomly drawn is:
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The future value of $1 per period for year one is:
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Given a decrease in interest rate line 3 will:
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Given a change in interest rates, can the relationship between the lines representing the 6 basic functions of $1 “change”?
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Which of the 6 basic functions is always the lowest line at any interest rate?
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Which distribution has the highest mean?
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Which distribution has the highest mode? Assume equal scales on the X and Y axis.
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Line one represents the following financial function:
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Line two represents the following financial function:
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Line four represents the following financial function:
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Given a graph of factors at a higher interest rate, line three would:
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Which Distribution has the highest mean?
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Which distribution has the highest standard deviation?
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Assuming five of the six functions of $1 are represented, which line represents the sinking fund factor?
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Which lines would overlap and be the same lines if the interest rate was zero?
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Which line represents the present value of $1?
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Which distribution has the highest mode?
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Which distribution has the highest mean?
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Line four represents the following financial function:
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Line one represents the following financial function:
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The market tenant improvement allowance is $12 psf, assume a market rent of $17.00 psf for 3 year leases. What should be the rental rate (psf per year) for a market yield rate of 12.5% for annual discounting and a tenant allowance of $12.00 psf?
Correct!
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Given that percentage rent of 8%, a value of $280,000, OER (on EGI) of 44%, Ro = 14%, and vacancy of 9%, what are the annual sales?
Correct!
Wrong!

Net income before property taxes & allowance for replacements) = $55,000 (excluding taxes & reserves)
Ro from sales with an allowance for replacements & property taxes in the expense estimates = 16%
Reserves are 1.8% of value and property taxes are 3.4% of value.
Yo = 18% (Discount rate in cash flow analysis)
=======================================
What is the value?
Ro from sales with an allowance for replacements & property taxes in the expense estimates = 16%
Reserves are 1.8% of value and property taxes are 3.4% of value.
Yo = 18% (Discount rate in cash flow analysis)
=======================================
What is the value?
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What is the value assuming a 5 year tax abatement?
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According to the given conditions; Which one is larger Re or Ye?
* Property sold had an Ro of 10%
*Income and value are expected to remain the same
*Rm is 11% with the loan being amortized over 20 years at 10.25%.
* Property sold had an Ro of 10%
*Income and value are expected to remain the same
*Rm is 11% with the loan being amortized over 20 years at 10.25%.
Correct!
Wrong!

What is the relationship of RFS to RLF? When the sales from the market are of leased fee interests (multitenant properties)?
Note: Rents are rising and contract rents tend to somewhat lag market rents.
Note: Rents are rising and contract rents tend to somewhat lag market rents.
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If income is increasing and Ro remains stable, which of the following is true?
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In most analysis, which is greater the RLF, RLH, or RFS?
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Why is a discount rate used instead of R in Leasehold valuations?
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Which of the following is a cash flow rate to an investor?
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A seller sold a property worth $2,000,000 for $2,200,000 with 20% down and a note at 5% interest only for 7 years, with monthly payments.
What is the applicable discount rate for the seller financing?
What is the applicable discount rate for the seller financing?
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Wrong!

What is the net effective monthly rent if an owner offers 12 months free on a 60 month lease,
with the nominal rate being $15.00 psf/year and the Yo being 13%?
with the nominal rate being $15.00 psf/year and the Yo being 13%?
Correct!
Wrong!

What is the appropriate way to value a life estate?
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Taking the given conditions; what will happen to the Ro?
* Io decreased 20%
* EGIM decreased 20%
* Value remains the same
* Io decreased 20%
* EGIM decreased 20%
* Value remains the same
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What is the percent change in the equity position assuming value increases 10% in 5 years?
* DCR is 1.25
* Rm = .10
* 20% downpayment
* Monthly payments for 15 years
* Ye = 15%
* DCR is 1.25
* Rm = .10
* 20% downpayment
* Monthly payments for 15 years
* Ye = 15%
Correct!
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A property was purchased with $200,000 down. The Re was 6%, but equity increased 1% per year for 4 years. The after resale proceeds were $250,000. What is the Ye?
Correct!
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Using the following information, what is the discount rate?
* Ro = 10.5%
* RN = 8.5%
* N = 5 years
* Io increases 2% per year compounded
* Ro = 10.5%
* RN = 8.5%
* N = 5 years
* Io increases 2% per year compounded
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Compare valuing a property with a DCF or mortgageequity analysis such as use of Elwood.
Which yields the higher value?
Which yields the higher value?
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The net present value of cash flows is $1,000 when discounted at 11% and $500 when discounted at 12%.
What is the IRR?
What is the IRR?
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If Ro ranges from 10% to 11% and financing is available at 8.5% with 25 year terms, what effect will an increase in loanto value ratio have on Re?
Correct!
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A property sold for $1,000,000 with property taxes of $10,000 based upon a frozen assessment. The Io was $100,000 at sale and the property is reappraised at sale for tax purposes with the local tax rate being 2%.
What was the expected Ro if the property is reappraised at sale?
What was the expected Ro if the property is reappraised at sale?
Correct!
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Assume a total project cost of $1,000,000 with land, but excluding profit of 15% on project cost.
Assume a Yo of 13%, change in value of 10% over five years and level income.
What is the discount rate (Yo) applicable to this property if the 15% or $150,000 in profit was included in the total project cost?
Assume a Yo of 13%, change in value of 10% over five years and level income.
What is the discount rate (Yo) applicable to this property if the 15% or $150,000 in profit was included in the total project cost?
Correct!
Wrong!

Given the following annual cash flows, and a discount rate of 10%, what is equivalent level income?
250,000
300,000
278,000
450,000
533,000
250,000
300,000
278,000
450,000
533,000
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A tenant is quoted a lease rate of $20 psf/year, with a $15 psf finish allowance (most tenants pay $10 to $20 psf over the allowance) on a 5 year lease. Assume the residual value of tenant finish is 20% of cost and the tenant wants a reduced rate for paying for all the tenant finish.
What monthly rental rate should be quoted if the investor yield is 12%?
What monthly rental rate should be quoted if the investor yield is 12%?
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A reversion is ________________.
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What is Rm in 10 years if the following terms apply to a loan? Interest is 7%, 20 year payments (annual).
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A lender has a note with terms of 75% loanto value, 8% interest, 20 year amortization (monthly payments) and one point paid up front. The loan term is 5 years.
However, the borrower may extend the loan for 3 additional years if they pay 1.5 points on the balance.
Assume the borrower will renew, what is the yield to the lender?
However, the borrower may extend the loan for 3 additional years if they pay 1.5 points on the balance.
Assume the borrower will renew, what is the yield to the lender?
Correct!
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