Real Estate Principles II Math

Question 1

adjusted basis
(investment property)

Answer 1

basis + cost of improvements + qualified closing costs – realized depreciation = adjusted
basis (investment property)

Question 2

adjusted basis
(primary residence)

Answer 2

basis + cost of improvements + qualified closing costs = adjusted basis (primary residence)

Question 3

annual interest

Answer 3

principal x interest rate = annual interest

Question 4

area (square footage)

Answer 4

length x width = area

Question 5

area of triangle

Answer 5

1/2 x base x height = area

Question 6

asking price

Answer 6

square footage x price per square foot = asking price

Question 7

assessed value

Answer 7

full market value x uniform percentage = assessed value

Question 8

capital gain

Answer 8

realized gain – adjusted basis = capital gain

Question 9

converting square
footage to acreage

Answer 9

square footage ÷ 43,560 square feet per acre = acres

Question 10

cost per point

Answer 10

total cost of points ÷ number of points = cost per point

Question 11

depreciation (%)

Answer 11

age of property ÷ total useful life = depreciation (%)

Question 12

depreciation cost ($)

Answer 12

reproduction cost x depreciation (%) = depreciation cost ($)

Question 13

discount point fees

Answer 13

principal balance x loan points = discount point fees

Question 14

down payment ($)
amount given leverage

Answer 14

sales price x down payment (%) = down payment ($)

Question 15

effective gross income

Answer 15

gross potential income - vacancy cost = effective gross income (EGI)

Question 16

gross rent multiplier

Answer 16

property price ÷ annual rent income = gross rent multiplier (GRM)

Question 17

gross rental income

Answer 17

monthly rent + other income = gross rental income

Question 18

loan principal given
cost per point

Answer 18

cost per point x 100 = loan principal

Question 19

loan-to-value ratio
(leverage)

Answer 19

loan amount ÷ purchase price = loan-to-value ratio

Question 20

max monthly payment
(back-end)

Answer 20

monthly income x debt-to-income ratio - other debt = monthly payment

Question 21

max monthly payment
(front-end)

Answer 21

monthly income ÷ payment-to-income ratio = monthly payment

Question 22

month 2 balance

Answer 22

original principal balance – P1 = month 2 balance

Question 23

monthly income required
to make a given front-
end payment

Answer 23

monthly payment ÷ payment-to-income ratio = monthly income

Question 24

monthly interest

Answer 24

annual interest ÷ 12 months = monthly interest

Question 25

monthly interest payment

Answer 25

interest rate x principal balance ÷ 12 months = monthly interest payment

Question 26

net lease rent

Answer 26

fixed rent + property expense(s) = net lease rent

Question 27

net operating income

Answer 27

EGI - operating expenses = net operating income (NOI)

Question 28

occupancy rate

Answer 28

occupied units ÷ total units = occupancy rate

Question 29

part

Answer 29

total x percentage = part

Question 30

payment-to-income ratio (front-end or housing expense ratio)

Answer 30

monthly payment ÷ monthly income = payment-to-income ratio

Question 31

percentage

Answer 31

part ÷ total = percentage

Question 32

percentage lease rent

Answer 32

fixed rent + (overage x sales rate) = rent

Question 33

portion of first payment going towards interest

Answer 33

(interest rate x principal balance) ÷ 12 = I1

Question 34

portion of first payment going towards principal

Answer 34

monthly payment – I1 = P1

Question 35

portion of second payment going towards interest

Answer 35

(interest rate x month 2 balance) ÷ 12 = I2

Question 36

portion of second payment going towards principal

Answer 36

monthly payment – I2 = P2

Question 37

price per square foot

Answer 37

asking price ÷ square footage = price per square foot

Question 38

projected gross income

Answer 38

contract rent ÷ projected rent = projected gross income (PGI)

Question 39

property tax savings

Answer 39

total exemptions x tax rate = property tax savings

Question 40

property taxes

Answer 40

tax rate x assesed value = property taxes

Question 41

property taxes

Answer 41

taxable value x tax rate = annual property taxes due

Question 42

property value

Answer 42

reproduction cost - depreciation + land value = property value

Question 43

proration

Answer 43

item cost x portion of cost party is responsible for = amount charged to given party

Question 44

quarterly interest

Answer 44

annual interest ÷ 4 = quarterly interest

Question 45

realized gain

Answer 45

sales price – selling costs = realized gain

Question 46

sale price with VA entitlement

Answer 46

sale price - down payment = 4 x (entitlement + down payment)

Question 47

special assessment

Answer 47

total special assessment cost x homeowner's share = special assessment

Question 48

street paving assessment

Answer 48

[(front feet x amount per linear foot) x owner percentage] ÷ 2 = street paving assessment

Question 49

tax base

Answer 49

total assessed value – total exemptions = tax base

Question 50

tax rate

Answer 50

tax requirement ÷ tax base = tax rate

Question 51

total

Answer 51

part ÷ percentage = total

Question 52

taxable value

Answer 52

assessed value – homestead exemptions = taxable value

Question 53

total cost of points

Answer 53

loan points x loan principal = total cost of points

Question 54

total debt-to-income ratio (back-end ratio)

Answer 54

monthly income ÷ total monthly debts = DTI

Question 55

total interest paid

Answer 55

total loan cost – original loan principal = total interest paid

Question 56

total loan cost

Answer 56

monthly payment x number of payments = total loan cost

Question 57

value (IRV)

Answer 57

net operating income (I) ÷ capitalization rate (R) = value (V)

Question 58

variable lease rent

Answer 58

(new index ÷ original index ) x original rent rate = new rent rate

Question 59

volume

Answer 59

length x width x height = volume