N10 Income Appraisal & Environmental Issues Flashcards Preview

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Flashcards in N10 Income Appraisal & Environmental Issues Deck (39)
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1

The process of converting income to value.

Capitalization

2

The period of time over which a property will produce income and be economically beneficial to the owner.

Economic Life

3

The formula for calculating the net income is:

Gross Income
- Operating Expenses
_______________
= Net Income

4

The rate of return that an investor desires and by which net income is converted to value is the ______.

Capitalization Rate (Cap Rate)

5

The cap rate is a reflection of an investment’s _____.

Risk

6

The memory circle formula for the income approach to value is:

Net Income
_______________ or Net Income ÷ (Value * Cap Rate)
(Value) * (Cap Rate)

7

Using the I =RV formula: Value =

I = Net Income V= Value R = Cap Rate
I = RV is equal to Net Income= Cap Rate* Value
V = I/R thus Value = Net Income/Cap Rate

8

Using the I =RV formula: Cap Rate =

I = Net Income V= Value R = Cap Rate
I = RV is equal to Net Income= Cap Rate* Value
R= I/V is equal to Cap Rate = Net Income/ Value

9

Using the I =RV formula: Net Income =

I = Net Income V= Value R = Cap Rate
I = RV is equal to Net Income= Cap Rate* Value
I = RV thus Net Income = Net Income= Cap Rate* Value

10

GRM stands for:

Gross Rent Multiplier

11

The formula for calculating value using a GRM is:

Value = Rent or Gross Income x GRM

12

The formula for calculating a GRM from a comparable sale is:

GRM = Sale Price (of comparable) ÷ Rent (of comparable)

13

Reconciliation

The process of bringing appraisal data together to arrive at a final estimate of value.

14

Arizona real estate agents may prepare property evaluations for a fee but may not call the evaluation an _____. However, they may call it a ______.

Appraisal, Broker Priced Opinion

15

The federal government agency that regulates environmental issues is the ____________________.

Environmental Protection Agency (EPA)

16

The Arizona state agency that regulates environmental issues is the _________________________.

Arizona Department of Environmental Quality (ADEQ)

17

The Arizona state agency that regulates water law is the ________________________________.

Arizona Department of Water Resources (ADWR)

18

The Arizona Commissioner’s Rules require ___________ of environmental problems.

Disclosure

19

Lead

A toxic substance found in the paint of buildings constructed prior to 1978.

20

Buyers and lessees of pre 1978 buildings must be given copies of _____ and a _____.

Reports, Lead Paint Booklet

21

Buyers of pre 1978 buildings must be given the right to ______ the property prior to becoming _________ under the _________ contract.

Inspect, Obligated, purchase

22

A naturally occurring gas that is known to cause lung cancer.

Radon

23

A fiber that can cause respiratory diseases.

Asbestos

24

Asbestos in buildings is dangerous when it becomes _______.

Friable (easily crumbled)

25

Encapsulation

The most common method of abating asbestos.

26

______ is often caused by Excess Moisture in buildings.

Mold

27

__________ can allow mold to thrive.

Airtight Windows

28

The general process of investigating a property to determine is hazardous substances exist is _____ aka ________.

Discovery aka Due Diligence

29

The process of inspecting a property, reviewing public records and interviewing former owners and tenants to determine if contamination exists is a ____________.

Phase 1 Assessment

30

Phase II Assessment.

The process of taking and analyzing soil samples to determine if contamination exists.