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Question
Given the following information, calculate the going-in capitalization rate for the specific property. First-year NOI: $87,750, Acquisition price: $1,250,000, Equity Investment: 35%; Before-tax cash flow: $53,500.
A. 4.3%
B. 7.0%
C. 10.8%
D. 20.1%
Answer
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Related questions
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Which of the following types of direct co-ownership combines single person ownership with tenancy in common?
A. Cooperative
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C. Condominium
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Which of the following types of direct co-ownership is a form of joint tenancy for husband and wife created by marriage that protects each spouse from liens arising from either spouse alone?
A. Tenancy in common
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B. The right of disposition is diminished with a leasehold estate.
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Suppose an older homeowner lives adjacent to an expanding university that is interested in acquiring her residence for future university use. To allow the homeowner to continue to retain all rights of exclusive possession, use, and enjoyment during her lifetime, yet provide the university with the right of disposition, the university may want to purchase a(n):
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Q:
Which of the following types of ownership estates is the most complete bundle of rights, and therefore carries the greatest value?
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Q:
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Q:
A primary determinant of the feasibility of new construction is the relationship between the current level of property prices and the cost of new construction. We would expect the supply of properties to:
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Q:
Considered a fundamental pricing metric in commercial real estate markets, the ratio of a propertys annual net income to its market value is more commonly referred to as a(n):
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Q:
Investors in real estate can choose to hold properties directly in the private market or indirectly through publicly traded real estate securities. The market for buying selling, and leasing real estate can be characterized by all of the following EXCEPT:
A. localized markets
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Q:
By the fourth quarter of 2015, U.S. households had accumulated $12.5 trillion in housing equity, which represents about 14 percent of their net worth. What proportion of U.S. households own their home?
A. one-third
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Q:
Each property has unique features, whether it is its age, the building design of its structures, or its location. As such, real estate markets consist of assets that are considered:
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Q:
If we desire to classify land by its use, land that does not include any improvements to the land would be categorized as:
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B. Building site
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Q:
Externalities can play an important role in determining a propertys price, either by adding value through positive externalities or by diminishing value through negative externalities. Which of the following is most likely to be considered a negative externality?
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B. Quality neighborhood schools
C. Public assistance facilities such as homeless shelters.
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Q:
A law requiring any contract conveying a real property interest to be in writing in order to be enforceable is a modern application of the:
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A. Statute of Frauds
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While the vast majority of conveyances of real property are private grants through a deed, there are multiple ways in which voluntary conveyance can occur without a deed. Which of the following types of easements can occur if a landowner gives an adjacent landowner permission to depend on her land? (E.g. A landowner may give a neighbor permission to rely on sewer access or drainage across his or her land.)
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B. Easement of necessity
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Q:
The type of deed offered by the grantor is communicated through a phrase such as does herby grant, bargain, sell and convey unto . . . This clause is referred to as the:
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Q:
A deed is a special form of written contract used to convey a permanent interest in real property. Unlike most contracts, a deed requires:
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B. only the grantee to be legally competent and of legal majority age.
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Q:
Which of the following leasehold estates best describes the situation in which a tenant who previously occupied a property under a legitimate leasehold interest refuses to vacate?
A. Tenancy for years
B. Tenancy at will
C. Periodic tenancy
D. Tenancy at sufferance
Q:
Since an easement is a non-possessory interest, it is important to understand the right of disposition that is associated with it. In which of the following types of easements is the right of disposition claimed as part of the easement?
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C. Negative easement appurtenant
D. Positive easement appurtenant
Q:
When multiple individuals have use of a property, but their interests are not simultaneous, this type of co-ownership is referred to as a:
A. Cooperative
B. Tenancy by the entirety
C. Condominium
D. Timeshare
Q:
In a mortgage agreement, the borrower conveys to the lender a security interest in the mortgage property. The lender, i.e. the individual who receives the mortgage claim, is known as the:
A. broker
B. mortgagor
C. agent
D. mortgagee
Q:
Most Adjustable Rate Mortgage (ARM) loans have been marketed with a temporarily reduced interest rate commonly referred to as a:
A. rate cap
B. teaser rate
C. payment cap
D. prepayment rate
Q:
A significant number of mortgage loans use adjustable interest rates, in which the interest rate of the loan is tied to an index rate that fluctuates over time. For income-producing property, the most common index rate is the:
A. one-year U.S. Treasury constant maturity rate
B. prime rate
C. London Interbank Offered Rate (LIBOR)
D. cost-of-funds index
Q:
Analysis of a subject propertys pro forma reveals that its fifth year net operating income (NOI) is projected to be $100,282 (you can assume that this cash flow occurs at the end of the year). If you estimate the projected rental growth rate for the property to be 3% per year and the going-out capitalization rate in year five to be 10%, determine the net sale proceeds the current owner of the property would receive if he were to sell the property at the end of year five and incur selling expenses that amounted to $58,300.
A. $944,520.00
B. $974,610.00
C. $1,002,820.00
D. $1,032,910.00
Q:
Suppose that examination of a pro forma reveals that the fifth year net operating income (NOI) for an income producing property that you are analyzing is $138,446 (you can assume that this cash flow occurs at the end of the year). If you estimate the projected rental growth rate for the property to be 5% per year, determine the projected sale price of the property at the end of year five if the going-out capitalization rate is 9%.
A. $988,900.00
B. $1,465,037.00
C. $1,538,289.00
D. $1,615,203.00
Q:
Suppose that an income producing property is expected to yield cash flows for the owner of $10,000 in each of the next five years, with cash flows being received at the end of each
period. If the opportunity cost of investment is 12% annually and the property can be sold for $100,000 at the end of the fifth year, determine the value of the property today.
A. $36, 047.76
B. $56,742.69
C. $83,333.33
D. $92,790.45