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Flashcards in Appraisal Income Approaches & Environmental 10 Deck (71)
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1

The "Income Remaining" after Operating Expenses Deducted From the Gross Income (Annual Rent Collected)

Net Operating Income -

The "Income Remaining" after Operating Expenses deducted from the Gross Income (Annual Rent Collected)

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2

Income Approach Methods are:

  1. Cap_______ -  (Income = Value x Rate)
  2. G_____ Rent M______ - Value/GI = CRM
  3. Recon________ Data - 3 Appraisal Methods Together

Income Approach Methods are:

  1. Capitalization -  (Income = Value x Rate)
  2. Gross Rent Multiplier - Value/GI = GRM
  3. Reconciliation Data - 3 Appraisal Methods Together

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3

Ec_______ L___

Period of Time of which a Property will Produce Income.

Economic Life -

Period of Time of which a Property will Produce Income.

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4

Gross Annual Income - Operating Expenses Equals What?

Net Income aka Net Operating Income =

Gross Annual Income - Operating Expenses

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5

Rate of Return an Investor Wants to Receive for a Property is called?

Capitalization Rate (Cap Rate) -

Rate of Return an Investor Wants to Receive for a Property.

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6

Using the Capitalization Method, How Do You Determine Value?

Capitalization Method - To Determine Value

Net Income (yr) / Cap Rate(Rate of Return) = Value

  • Formula: (I=RV)
  • Net Income (Yr)  
  • Value x Cap Rate 

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7

What is Sometimes Used to Determine "Value" on Smaller Income Properties?

V=GGI

(GRM) Gross Rent Multiplier for Smaller Income Properties -  Formula V=GGI

Answer: GRM x Gross Income (Mo) = Value

  •          Value                             
  • GRM x Gross Inc Mo (Subj)

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8

What is Formula to Determine Value for Small Income Properties using GRM?

V=GGI

Formula to Determine Value for Small Income Properties,  using GRM

Answer:  GRM X Gross Inc (Mo) = Value-Price

******Value / GI = GRM

  •     Sales Price                
  • Gross Inc Mo x GRM

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9

(EPA) Env_______ Prot______ Ag____

Regulates Federal Environmental Rules and Laws.

(EPA) Environmental Protection Agency - Federal

Regulates Federal Environmental Rules and Laws.

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10

(ADEQ) AZ Dept of Env_________ Q______

Sets State Environmental Standards

(ADEQ) Arizona Dept of Environmental Quality -

Sets State Environmental Standards

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11

(ADWR) AZ Dept of W____ R______

Regulates use of Ground Water

(ADWR) Arizona Dept of Water Resources

Regulates use of Ground Water

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12

(ADRE) Arizona D___ of Real E_____ -

Must Obey Commissioner's Rules Requirements to Disclosure

(ADRE) Arizona Dept of Real Estate -

Must Obey Commissioner's Rules Requirements to Disclosure

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13

HUD Title __ (Requirements) -

Lead Base Requirements are Found under HUD Title __ for Pre-1978 Building's with Lead Paint.

HUD Title X (Requirements) -

Lead Base Requirements are Found under HUD Title X for Pre-1978 Building's with Lead Paint.

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14

Lead Base Paint (HUD Title X)

  1. Built Pre ____- Disclose Presence of Known Lead in Residential Homes
  2. Records - Provide Buyer/Leasee with
  3. "Lead Base P_____ P______" - Provide Buyer
  4. Risk Assessment Inspection - Purchaser has ___ Dys or Agreed Time to Conduct
  5. Dis_____/Ack________ Language -Sales/Lease Contracts Must Include.

Lead Base Paint (HUD Title X) -

  1. Built Pre 1978 - Disclose Presence of Known Lead in Residential Homes
  2. Records - Provide Buyer/Leasee with   
  3. "Lead Base Paint Pamphlet" - Provide Buyer
  4. Risk Assessment Inspection - Purchaser has 10 days or Agreed Time to Conduct
  5. Disclose/Acknowlegment Language -Sales/Lease Contracts Must Include.

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15

R_____

  1. Natural Odorless, Tasteless Radioactive Gas -
  2. Causes Lung Cancer

Radon -

  1. Natural Odorless, Tasteless Radioactive Gas -
  2. Causes Lung Cancer

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16

Asb_______

  1. Tiny Airborne Fiber
  2. Creates Respiratory Diseases

Asbestos -

  1. Tiny Airborne Fiber
  2. Creates Respiratory Diseases

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17

M____

  1. Caused by Excess Moisture
  2. Airtight Windows

Mold -

  1. Caused by Excess Moisture
  2. Airtight Windows

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18

Surface and Ground Water Contamination -

Types of Contamination:

  1. Conta______ Well Sites
  2. Underground Pl_____
  3. W____ Disp__ Systems
  4. Leaking Underground Stor___ Ta___ (LUST)

Surface and Ground Water Contamination -

Types of Contamination:

  1. Contaminated Well Sites
  2. Underground Plumes
  3. Waste Disposal Systems
  4. Leaking Underground Storage Tank (LUST)

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19

Soil Contamination (4)

  1. Pestic_____
  2. Herbic____
  3. Fert_____ and
  4. Sol______

Soil Contaminations as follows -

  1. Pesticides
  2. Herbicides
  3. Fertilizers and
  4. Solvents

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20

E________ Soil -

Soils that May Absorb Water and Expand

Expansive Soil -

Soils that May Absorb Water and Expand

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21

What causes Lung Cancer?

Radon -

  1. Natural Odorless, Tasteless Radioactive Gas -
  2. Causes Lung Cancer

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22

Fiss___

Cracks that occur on Valley Floors from Extensive Groundwater Withdrawal

Fissures -

Cracks that occur on Valley Floors from Extensive Groundwater Withdrawal

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23

B_______

Defunct, Aban______ Commercial or Industrial Site Contaminated with Toxic Waste.

Brownfield -

Defunct, Abandoned Commercial or Industrial Site Contaminated with Toxic Waste.

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24

Disco______ aka D__ Dil_______ -

Process of Investigating the Property to Determine if Hazardous Substances or Pollution Exist.

Agent Exercises Reasonable Skill and Care and Must Disclose

Discovery aka Due Diligence -

Process of Investigating the Property to Determine if Hazardous Substances or Pollution Exist.

Agent Exercises Reasonable Skill and Care and Must Disclose.

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25

Ph___ __ Assessment -

Process of Inspecting Property, the Review of Public Records and Interview Owners/Tenants to Determine if Contamination Exist.

Phase 1 Assessment -

Process of Inspecting Property, the Review of Public Records and Interviewing Owners/Tenants to Determine if Contamination Exist.

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26

Phase 2 Assessment -

Process of Taking S_____ to Analyze if Pollution Exists.

Remember: Phase 1 - Inspecting Property; Review Public Records, Interview Owners/Tenants to Determine if Contamination Exists.

Phase 2 Assessment -

Process of Taking Samples taken to Analyze if Pollution Exists.

Remember: Phase 1 - Inspecting Property; Review Public Records, Interview Owners/Tenants to Determine if Contamination Exists.

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27

Phase 3 Assessment -

Core Samples taken and Actual C____-Up of Contamination

Phase 3 Assessment -

Core Samples taken and Actual Clean-up of Contamination

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28

Superfund/Mini-Superfund - Property Location -

Realtor must Dis_____ Knowledge of Property Located in Boundaries of Super or Mini-Superfund as per Real Estate Comissioner

Superfund/Mini-Superfund - Property Location -

Realtor Must Disclose Knowledge of Property Located in Boundaries of Super or Mini-Superfund as per Real Estate Comissioner

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29

S_________ -

Fund Set Up by Federal (CERCLA) Comprehensive Environmental Response Compensation and Liability Act to Bear Cost of Clean Up

Superfund -

Fund Set Up by Federal (CERCLA) Comprehensive Environmental Response Compensation and Liability Act to Bear Cost of Clean Up

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30

Mini-S_________ -

Fund is Set Up by State (WQARF) Water Quality Assurance Revolving Fund

  1. Bears cost of Clean-Up that CERCLA Does Not Cover.

Mini-Superfund -

Fund Set Up by State (WQARF) Water Quality Assurance Revolving Fund

  1. Bears cost of Clean-Up that CERCLA Does Not Cover.

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