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Question
Suppose that you have begun to gather some demographic data in order to project the potential sales of a new development project. The developer hopes to be able to target the following household types who fall in the upper 10% of income brackets: Empty Nesters, Single Parents, and Unrelated Individuals. Utilizing the following population information, determine the core market share that the development project yearns to target with this project. Total Owner Occupant Households: 48,000; Traditional Families in the Upper 10% of Income Brackets: 25,000; Empty Nesters in the Upper 10% of Income Brackets: 5,000; Single Parents in the Upper 10% of Income Brackets: 10,000; Unrelated Individuals in the Upper 10% of Income Brackets: 8,000A. 4.17%
B. 47.92%
C. 52.08%
D. 92.00%
Answer
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Related questions
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A. Rehabilitation
B. Remodeling
C. Adaptive reuse
D. Conversion
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In considering the main components of a construction budget, which costs would be expected to constitute the largest portion of a development project's expense?
A. Land costs
B. Hard construction costs
C. Soft construction costs
D. Marketing costs
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With a site under control, the developer will begin to evaluate the feasibility of the project. The main tool that a developer will use in determining the financial feasibility of a project is:
A. Net present value (NPV) analysis
B. Cost approach to valuation
C. Repeat-sales approach
D. Direct capitalization
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While the risks of construction lending may be less in a number of respects than those associated with land acquisition, banks still require a premium in their lending rate as compensation for the risks involved. For construction loans, banks typically require a premium above LIBOR that ranges from:
A. 0-50 basis points
B. 50-150 basis points
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Assume a retail tenant is paying a base rent of $120,000 per year (or $10,000 per month). In addition, the tenant must pay 7 percent of gross store sales in excess of $143,000 per month as percentage rent. If the store produces $170,000 in gross sales in a month, what is the total rent due for the month?A. $10,000B. $10,158C. $11,890D. $21,900
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A. High-rise apartment buildings
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While a sublease and an assignment are two distinct choices for a tenant who wishes to transfer his rights during the term of a lease, both agreements:
A. transfer all of a tenant's rights to another party
B. transfer only a subset of rights to another party
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When the supply of space exceeds the demand, it is common for owners to provide the tenant with a period of free or perhaps reduced rent. This is commonly referred to as a(n):
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Under certain circumstances, investors are permitted to reduce the amount of the taxable income that they report by an amount that is intended to reflect the wear and tear of an asset over time. This is commonly referred to as:
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B. depreciation
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D. capital losses
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U.S. tax law is designed to raise revenues for the operations of the federal government and to promote certain socially desirable real estate-related activities. Tax legislation is combined into a single section of the federal statutory law commonly referred to as:
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The use of financial leverage in purchasing an income-producing property can affect the amount of cash required at acquisition, the net cash flows from rental operations, the net cash flows from the eventual sale of the property, and the ultimate return on invested equity. Assuming the going-in IRR is greater than the effective borrowing cost, if an investor increases his leverage rate, say from 75% to 80%, we would expect which of the following to occur?
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The loan-to-value ratio measures the percentage of the acquisition price (or current market value) encumbered by debt. To protect their invested capital in the event that property values do fall, commercial mortgage lenders generally require that the senior mortgage not exceed approximately what percentage of the acquisition costs?A. 60%B. 70%C. 80%D. 90%
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It would be hard to overstate the importance of the Federal Housing Administration (FHA) in the history of housing finance. Which of the following instruments created by the FHA is considered the single most important financial instrument in modern housing finance?
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The Federal Housing Administration (FHA) insures loans made by private lenders that meet FHA's property and credit-risk standards. Which of the following statements concerning FHA insurance is true?
A. The insurance is paid by the lender and protects the lender against loss due to borrower default.
B. The insurance is paid by the borrower and protects the lender against loss due to borrower default.
C. The insurance is paid by the lender and protects the borrower against loss due to lender default.
D. The insurance is paid by the borrower and protects the borrower against loss due to lender default.
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Mortgage insurance rates vary with the perceived riskiness of the loan. Which of the following scenarios would result in a higher mortgage insurance premium?
A. Lower loan-to-value ratio
B. Shorter loan term
C. Stronger credit record of the borrower
D. A "cash-out" refinancing loan
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Considered the most common type of home loan, which of the following refers to any standard home loan that is not insured or guaranteed by an agency of the U.S. government?
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B. Federal Housing Administration loan
C. Veterans Affairs loan
D. Section 203 loan
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Foreclosure is considered the ultimate recourse of the lender because it allows the lender to bring about sale of the property to recover the outstanding indebtedness. All of the following statements regarding foreclosure are true EXCEPT:
A. Foreclosure is a costly process for all parties involved.
B. Only those claimants who are properly notified and engaged in the foreclosure suit can lose their claims to the property.
C. When a lender forecloses on a property, it extinguishes all superior liens, bringing about a free and clear sale of the property. .
D. The net recovery by a lender from a foreclosed loan seldom exceeds 80 percent of the outstanding loan balance and commonly is much less than this amount.