HW Quiz 7 Flashcards
Circle all of the true statements:
-A multiple is the reciprocal of a cap rate plus one
-Multiples or cap rates can directly tell you the value of a property
-A multiple is the reciprocal of a cap rate
-None of the options
-NOI multiplied by the cap rate plus one equals the value
-A cap rate is the reciprocal of a multiple
-A multiple is the reciprocal of a cap rate
-A cap rate is the reciprocal of a multiple
Circle all of the true statements:
-A multiple is the reciprocal of a cap rate plus one
-Multiples or cap rates can directly tell you the value of a property
-A multiple is the reciprocal of a cap rate
-None of the options
-NOI multiplied by the cap rate plus one equals the value
-A cap rate is the reciprocal of a multiple
-A multiple is the reciprocal of a cap rate
-A cap rate is the reciprocal of a multiple
The bundle of legal rights is what the law means by the word “estate”. The fee simple ownership rights include: (select all that apply)
-have a mortgage
-rent or lease to tenants
-convert from residential to commercial without permission
-building a structure and landscaping under permission
-occupy and use the real estate
-give away or devise by will
-sell or refuse to sell the real estate
-have a mortgage
-rent or lease to tenants
-building a structure and landscaping under permission
-occupy and use the real estate
-give away or devise by will
-sell or refuse to sell the real estate
For a fixed rate mortgage (FRM) that features a fixed mortgage rate, constant payment, and full amortization, please answer the following question using a financial calculator (e.g., HP12C or TI-BA II Plus) instead of excel.
Assumptions:
Loan Amount: 5,000,000
Annual Interest Rate: 6%
Maturity: 20 years
Amortization: 20 years at a monthly frequency
Question: what is the total principal paid during the period of month 1 (rounded to the nearest integer)?
10,822
For a fixed rate mortgage (FRM) that features a fixed mortgage rate, constant payment, and full amortization, please answer the following question using a financial calculator (e.g., HP12C or TI-BA II Plus) instead of excel.
Assumptions:
Loan Amount: 5,000,000
Annual Interest Rate: 6%
Maturity: 20 years
Amortization: 20 years at a monthly frequency
Question: what is the total interest paid during the period of month 1 (rounded to the nearest integer)?
25,000
__________ cost is an indication of what it would cost to build a building today and can be used as an additional tool to benchmark the value of a property.
Replacement
Fee simple ownership, most common in the U.S., has the highest form of ownership in real estate.
True
Calculate the value of the building that has a $1.2 million stabilized NOI at an 8% cap rate.
15,000,000
The Gordon Model can be used to estimate the value of a property if the projected NOI is expected to grow at what rate in perpetuity?
Constant
Why might a seller’s cap rate differ from a buyer’s cap rate? (circle all that apply)
-One party may not believe the property is stabilized
-The seller may be cheating the buyer
-Different people classify different costs as operating and non-operating
-The buyer believes there are different risks associated with the property
-None of the options
-They may be using the NOIs of different years
-One party may not believe the property is stabilized
-The seller may be cheating the buyer
-Different people classify different costs as operating and non-operating
-The buyer believes there are different risks associated with the property
-They may be using the NOIs of different years
For a fixed rate mortgage (FRM) that features a fixed mortgage rate, constant payment, and full amortization, please answer the following question using a financial calculator (e.g., HP12C or TI-BA II Plus) instead of excel.
Assumptions:
Loan Amount: 5,000,000
Annual Interest Rate: 6%
Maturity: 20 years
Amortization: 20 years at a monthly frequency
Question: what are the total principals paid from the beginning of month 1 to the end of year 5 (rounded to the nearest integer)?
755,020
Income multiple analysis: (select all that apply)
-estimates property income
-none of these
-estimates of property value by multiplying next year’s stabilized NOI by the price-to-NOI multiple
-is a difficult standard valuation method
-is a simple standard valuation method
-estimates of property value by multiplying next year’s stabilized NOI by the price-to-NOI multiple
-is a simple standard valuation method
A simple standard valuation method that estimates a property’s value by multiplying next year’s NOI by the price-to-NOI-multiple.
For a fixed rate mortgage (FRM) that features a fixed mortgage rate, constant payment, and full amortization, please answer the following question using a financial calculator (e.g., HP12C or TI-BA II Plus) instead of excel.
Assumptions:
Loan Amount: 5,000,000
Annual Interest Rate: 6%
Maturity: 20 years
Amortization: 20 years at a monthly frequency
Question: what are the total interests paid from the beginning of month 1 to the end of year 5 (rounded to the nearest integer)?
1,394,273
Industry often uses basis points (or bps) to measure the cap rate spread. Which of the following statements is correct?
-1 basis point is 1/10 of a percent
-1000 bps equals one percent
-1 basis point is 1/1000 of a percent
-100 basis points are one percent
-1 basis point equals one percentage point
100 basis points are one percent
The ownership of land includes: (select all that apply)
-surface rights
-air rights
-none of the options
-mineral rights
-surface rights
-air rights
-mineral rights
