Accounting
Anthropology
Archaeology
Art History
Banking
Biology & Life Science
Business
Business Communication
Business Development
Business Ethics
Business Law
Chemistry
Communication
Computer Science
Counseling
Criminal Law
Curriculum & Instruction
Design
Earth Science
Economic
Education
Engineering
Finance
History & Theory
Humanities
Human Resource
International Business
Investments & Securities
Journalism
Law
Management
Marketing
Medicine
Medicine & Health Science
Nursing
Philosophy
Physic
Psychology
Real Estate
Science
Social Science
Sociology
Special Education
Speech
Visual Arts
Question
Which of the following is NOT one of the development strategies that may be used by developers?
A) Selling and leasing back the land for the development
B) Owning and managing the real estate after sale
C) Selling the real estate after lease-up phase
D) Developing the real estate for lease in master-planned development
Answer
This answer is hidden. It contains 19 characters.
Related questions
Q:
Which of the following tax law changes has reduced the incentive for individuals to lease to corporations as a part of the Tax Reform Act of 1986?
A) Depreciation lives were lengthened
B) The highest marginal tax rate for corporations is much lower than the highest marginal tax rate for individuals
C) Individuals are subject to limitations on "passive" losses used to offset other taxable income
D) Income from corporations is no longer double taxed
Q:
If a company decides to lease a piece of real estate it will typically arrange for off-balance-sheet financing for the payments since they will be tracked on the income statement and not on the balance sheet.
Q:
Because accounting depreciation charges often exceed the true economic depreciation of real estate, the earnings of companies owning real estate typically understate the level of operating cash flow.
Q:
The residual value at the end of the holding period should be based on the market value of the real estate and not the book value.
Q:
A company estimates that the incremental cost of owning a parcel of real estate vs. leasing will be 10%. The company expects a 12% rate of return on investments. Therefore real estate should be owned and not leased.
Q:
Because real estate usually declines in value faster than accounting depreciation, it is reasonable to assume that the property has zero value at the end of the lease term.
Q:
A property could be sold today to provide an after-tax cash flow from sale of $800,000. The current after-tax cash flow from operations is $20,000, which is expected to grow by 4% per year. If sold next year, the property is expected to provide an after-tax cash flow of $824,000. What is the marginal rate of return for holding the property for an additional year?
A) 5.6%
B) 2.6%
C) 3.1%
D) 9.3%
Q:
An investor purchased a property expecting to receive a 14% rate of return. However, the rate of return on the property over a 5 year holding period turned out to be only 11.5%. Therefore, the property should be sold.
Q:
When evaluating the incremental costs of borrowing, if the interest rate is higher on the larger loan amount, the incremental cost of the additional funds borrowed tends to be lower than the rate on the larger loan.
Q:
An investor is considering refinancing a property. The current mortgage has an interest rate of 8.75% and a mortgage balance equal to 45% of the property value due to amortization of the loan and some appreciation in value. However, the investor would like to refinance at an amount equal to 75% of the property value. He has found out that the property can be refinanced at a 75% loan-to-value ratio for 9.5% interest over 15 years. What can be said about the incremental cost of refinancing?
A) It will be higher than 9.5%
B) It will be less than 9.5%
C) It will be equal to 9.5%
D) Can't tell without additional information
Q:
Which of the following would be considered when an investor is trying to decide whether or not to renovate a property?
A) After-tax operating income before renovation
B) The difference between future operating income if renovated and if not renovated
C) After-tax cash flow from sale the year of renovation
D) The mortgage balance on the property the year before renovation
Q:
An investor is considering renovating a building. The total cost of renovation is expected to be $100,000, of which 75% can be borrowed. Given the after-tax cash flows to the equity investor as showed below, what is the incremental return from renovating? 1
2
3
4
5 ATCF after renovation
9,200
10,000
12,000
14,000
316,000 ATCF-no renovation
10,000
10,200
10,440
10,680
160,900 A) 9.75%
B) 10.14%
C) 15.32%
D) 12.67%
Q:
A property is purchased for $350,000. Based on an annual growth rate of 3%, the resale value at the end of year 10 would be $456,671.
Q:
In the income approach to valuation, replacement cost is reduced by costs such as those that are associated with curing deterioration of the property and the economic loss of value from incurable factors due to change in design or layout efficiency.
Q:
A manufacturing business is contracting to lease a large, open building and is seeking to add partition walls and a large air conditioning unit in order to accommodate its specific needs. What type of lease is the building owner likely to want to agree to?
A) Gross lease
B) Modified lease with direct pass throughs
C) Single net lease
D) Triple net lease
Q:
Which of the following leads to rent premiums?
A) Apartments on the periphery of a site; higher floors with no elevators
B) Second or third levels in multi-level malls
C) Middle floors in an office building
D) Apartments on higher floors with elevators
Q:
Which of the following does the term "in-line tenants" refer to?
A) Smaller stores in a mall that are not anchor tenants
B) Tenants whose sales are in line with estimates
C) Tenants who pay their rents on a timely basis
D) All stores located inside the mall, including anchors
Q:
Income after deducting loss of rents due to vacancy and nonpayment of rents, as well as any concessions, is referred to as:
A) Potential gross income
B) Effective gross income
C) Net operating income
D) Before-tax cash flow
Q:
Analysis of effective rents tends to be superior to analysis of total rents over the life of a lease.
Q:
Financing costs are usually paid by the lender to either the borrower/buyer or the seller.
Q:
General industry standards for a conventional loan specify a maximum LTV of 60 percent.
Q:
For a loan with an LTV greater than 80 percent, the costs of mortgage insurance always exceed the costs of second lien financing.
Q:
A self-employed borrower who has documentable assets but is not able to provide adequate documentation for his income may be eligible for this type of loan:
A) FNMA
B) FHLMC
C) Conforming
D) Alt-A
Q:
Which of the following is the main objective of the FTL legislation?
A) More effective advance disclosure of settlement costs
B) More informative disclosure of the cost of credit
C) Elimination of kickbacks and unearned fees
D) A reduction in the amount of escrow placed in accounts for homeowners
Q:
A general partner is personally liable for the debts of the partnership whereas a limited partner has "limited liability" like shareholders in a corporation.
Q:
If a developer constructs some speculative buildings in hopes of identifying purchasers after completion, this is referred to:
A) Feasibility construction
B) Turnkey basis
C) Build to suit basis
D) Optional construction
Q:
Which of the following is FALSE regarding the release price?
A) It is usually calculated to pay off the loan when the last lot is sold
B) It is usually calculated to pay off the loan before the last lot is sold
C) Increasing the release price usually lowers the lender's risk
D) Increasing the release price is likely to lower the investor's initial cash flow
Q:
Which of the following might impact the density of housing in a land development project?
A) The price paid for the land by the developer
B) The terrain of the land
C) The target market's preferences regarding density
D) All of the above
Q:
The land development industry is best characterized by which of the following statements?
A) The land development industry is dominated by relatively few national competitors
B) The land development industry is highly fragmented, localized, and extremely competitive
C) Land development and project development are synonymous
D) The production technologies and market risks involved in land development are essentially the same as those in project development
Q:
Consider the feasibility study shown in the table. What is the return on total cost for the proposed project? Total sales revenue
$
10,000,000 Less: Development cost 6,000,000 Less: Land asking price 1,000,000 Potential gross profit
$
3,000,000 Less: Admin., legal, commissions, etc. 1,500,000 Potential net profit
$
1,500,000 A) 15.0%
B) 17.6%
C) 21.4%
D) 150.0%