100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
REE4303 Exam questions and answers 2024/2025 CA$12.33   Add to cart
Quickly navigate to
Preview
  2.  
  3. REE4303
  4.  
  5. REE4303

Exam (elaborations)

REE4303 Exam questions and answers 2024/2025
 6 views  0 purchase
  • Course
  • REE4303
  • Institution
  • REE4303

REE4303 Exam questions and answers 2024/2025. REE4303 Exam questions and answers 2024/2025 REE4303 Exam questions and answers 2024/2025.Advanced concepts of acquisition, ownership, and disposition of investment property; taxation and tax shelter; cash flow projection; analysis of specific type...

[Show more]

Preview 2 out of 6  pages

Document information

  • October 8, 2024
  • 6
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

Subjects

  • future value fv
  • non recourse
  • value of money in some period beyond time zero f
  • you can walk away from the property if something g

Written for

  • REE4303
  • REE4303

Seller

avatar-seller
LecFionah

Content preview

REE4303 Exam
Future Value (FV) - ANSvalue of money in some period beyond time zero.

FV=PV(1+r)^n

Non-Recourse - ANSyou can walk away from the property if something
goes wrong, no personal liability

Lump sum payment - ANSPayout, "balloon" payment, paying off the
balance of the loan at maturity

Partially amortizing loans - ANSriskier for the lender, if they have a large
amount leftover they can likely default on their loan

Lock Out - ANSprohibition against pre-payment of loan up to a certain
amount of time, prepayment of loans are risky/bad for lender

Yield Maintenance Penalty - ANSborrower must pay lender PV of losses due
to prepayment, used by life insurance companies

Prepayment Risk - ANSmarket interest rate declines, the borrower will want
to repay their mortgage, hurts the lender because they will receive a smaller
amount

Defeasance Penalty - ANSborrower must replace mortgage loan with a set of
US Treasury securities that produce CFs equivalent to those on paid-off mortgage
(prepayment penalty)

Mezzanine Mortgage - ANSequity interest of the 2nd borrower is pledged,
commonly used in addition to the first mortgage to offer more debt financing
options

Financial Risk - ANSprobability that the NOI is not enough to cover the debt
service

Debt service - ANSthe timely payment on the principal and interest of your
mortgage, monthly payments

Default risk - ANSrisk of default, financial risk doesn't necessarily have to
mean default risk

Debt Coverage Ratio - ANS"cash flow cushion"

, DCR = NOI/ DS (debt service)

Loan to Value Ratio - ANSLTV = Loan Amount/ Acquisition Price

Debt Yield Ratio - ANSindicator of lender's mortgage "return"

DYR = NOI / Loan Amount

Sale-leaseback - ANSowner-user (bank, restaurant, drug store, etc.) sells
property to long term real estate investor, then leases the property back from the
investor and occupies it under long term net lease

Letter of Intent (LOI) - ANSloan application quote, includes loan amount
and what interest rate they will be using

Land Acquisition Loan - ANSfinance purchase of raw land, speculative
development, RISKY

Land Development loan - ANSready for development, less riskier than
acquisition, what they are going to build can be pledged as collateral

construction loan - ANSless riskier, finance vertical construction

Public Equity - ANSalmost all of public equity is from real estate investment
trusts (REITS)

Private Equity - ANSpension funds, life insurance, foreign investors, hedge
and mutual funds

Public Debt - ANScommercial mortgage backed securities

Special Allocations - ANSmanagement team get a larger proportion of the
profit relative to their initial investment because they are basically doing all of the
work, works out incentives of shareholders who don't do much work compared
with management

General Partnership - ANSnot commonly used in CRE, liable for all debts
(personally)

Limited Partnerships - ANSone or 2 general partners, then multiple limited
partners. GP = developer or operator partners, LP= limited liabilities, will not
participate in the business operations.

Flow through tax treatment (no corporate level taxation or double taxation)

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller LecFionah. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for CA$12.33. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

75632 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
CA$12.33
  • (0)
  Add to cart