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IAAO 102 EXAM ACTUAL EXAM 200 QUESTIONS AND CORRECT DETAILED ANSWERSAGRADE
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IAAO 102 EXAM 2023-2024 ACTUAL EXAM 200 QUESTIONS ANDCORRECT DETAILED ANSWERS|AGRADE
5 Analysis Questions for Investors - - ans1. How much it cost?
2. How much will I get back?
3. When will I get it back?
4. What are the risk?
5. What are some comps ROI compared to my interested property?
Amortized Mortgage - ansFixed rate mortgage permanent loan in which the sum of the
principal and interest payments remains fixed throughout the term of the loan.
Anticipation - ansValue is created by the expectation of benefits to be derived in the
future
Chattel Mortgage - ansa mortgage only on personal property.
Contribution - ansthe value of a component of real estate can be measured by the
amount it contributes to net operating income because net operating income can be
capitalized into value.
Effective Gross Income (EGI) - ansobtained after determining the potential income for
the property
Effective Tax Rate (ETR) - ansReflect the relationship between the real estate taxes
and the value of the property.
Five Methods of Developing an overall capitalization rate - - ans1. Derivation from
comparable **** This is the one on the test
2. Band of Investment Technique (Mortgage & Equity Components)
3. Net Income Ratio
4. Debt coverage ratio
5. Band of Investment Technique (LAND AND IMPROVEMENT COMPONENTS)
Four factors to capture overall yield rate (Yô) - - ans1. Safe rate
2. Risk Rate
3. Rate for non-liquidity
4. Rate for Management
Gross Income Multiplier - ansrelationship between Effective gross income (EGI) and the
sales prices or property value
Gross Leasable Area (GLA) - ansincludes the entire area of the building
Gross Lease - ansthe landlord is required to pay all operating expenses associated with
the real estate.
,IAAO 102 EXAM 2023-2024 ACTUAL EXAM 200 QUESTIONS AND
CORRECT DETAILED ANSWERS|AGRADE
Income Approach - ansOne of the three approaches to value in which the appraiser
derives a value indication by converting anticipated benefits through ownership of
income -producing property is the ______________
Junior Mortgage - anstypical a second mortgage
Leverage - ansborrowing of funds in hopes of earning a greater return than the cost of
the borrowed funds. This amount can be be negative, positive, or neutral.
Market Value - ansmeans the most probable price which a property should bring in a
competitive and open market under all conditions.
Misc. Income - anssome misc income could be parking fees, vending machines, coin
operated laundries, etc
Month to Month Lease - ansshort term lease that May or may not me in written form.
This type of lease provides no security for the tenant or landlord.
Mortgage - ansmost common type of financing for real estate.
Mortgage Capitalization Rate - ansis the ratio of the annual principal and interest
payments to the amount borrowed.
Net Leasable Area (NLA) - ansincludes only the floor area occupied by the tenant.
Net Lease - ansthe tenant is required to pay all or part of the operating expenses
associated with the real estate.
Percentage Lease - ansa contract that requires a fixed minimum base event based on
volume of business, sales, productivity, or use of the property by the tenant is called
___________
Percentage Lease - ansa contract which calls for a fixed minimum base rent and a
variable rent.
Recapture Rate - ansProvides for the return of the investment in the wasting portion of
the assets.
Straight line Capitalization Assumption - ans1. Assume a declining income stream
during the remaining economic life of improvements
2. Recapture received in equal amount during the remaining economic life of the
improvements
3. The property's overall yield (discounts) is receive don't eh balance of the investment,
after a periodic recapture of portion oft h improvement value
,IAAO 102 EXAM 2023-2024 ACTUAL EXAM 200 QUESTIONS AND
CORRECT DETAILED ANSWERS|AGRADE
Substitution - ansthe prices, rents, and rates of return of property tend to be set by the
current prices, rents and rates of return for equally desire able substitute properties.
Tenant improvements - ansTerms of lease where it explains the extent of the work that
the landlord is willing to do in the form of a building or improvement allowance.
Types of Rents - - ans1. Market Rent
2. Contract Rent
3. Excess Rent
4. Percentage Rent
5. Deficit Rent
6. Effective Rent
What kind of expenses are capital improvements? - ansImproper Expenses.
What's a lease? - ansConsidered both a contract and conveyance
5 Analysis Questions for Investors - - ans1. How much it cost?
2. How much will I get back?
3. When will I get it back?
4. What are the risk?
5. What are some comps ROI compared to my interested property?
Amortized Mortgage - ansFixed rate mortgage permanent loan in which the sum of the
principal and interest payments remains fixed throughout the term of the loan.
Anticipation - ansValue is created by the expectation of benefits to be derived in the
future
Chattel Mortgage - ansa mortgage only on personal property.
Contribution - ansthe value of a component of real estate can be measured by the
amount it contributes to net operating income because net operating income can be
capitalized into value.
Effective Gross Income (EGI) - ansobtained after determining the potential income for
the property
Effective Tax Rate (ETR) - ansReflect the relationship between the real estate taxes
and the value of the property.
Five Methods of Developing an overall capitalization rate - - ans1. Derivation from
comparable **** This is the one on the test
2. Band of Investment Technique (Mortgage & Equity Components)
3. Net Income Ratio
4. Debt coverage ratio
, IAAO 102 EXAM 2023-2024 ACTUAL EXAM 200 QUESTIONS AND
CORRECT DETAILED ANSWERS|AGRADE
5. Band of Investment Technique (LAND AND IMPROVEMENT COMPONENTS)
Four factors to capture overall yield rate (Yô) - - ans1. Safe rate
2. Risk Rate
3. Rate for non-liquidity
4. Rate for Management
Gross Income Multiplier - ansrelationship between Effective gross income (EGI) and the
sales prices or property value
Gross Leasable Area (GLA) - ansincludes the entire area of the building
Gross Lease - ansthe landlord is required to pay all operating expenses associated with
the real estate.
Income Approach - ansOne of the three approaches to value in which the appraiser
derives a value indication by converting anticipated benefits through ownership of
income -producing property is the ______________
Junior Mortgage - anstypical a second mortgage
Leverage - ansborrowing of funds in hopes of earning a greater return than the cost of
the borrowed funds. This amount can be be negative, positive, or neutral.
Market Value - ansmeans the most probable price which a property should bring in a
competitive and open market under all conditions.
Misc. Income - anssome misc income could be parking fees, vending machines, coin
operated laundries, etc
Month to Month Lease - ansshort term lease that May or may not me in written form.
This type of lease provides no security for the tenant or landlord.
Mortgage - ansmost common type of financing for real estate.
Mortgage Capitalization Rate - ansis the ratio of the annual principal and interest
payments to the amount borrowed.
Net Leasable Area (NLA) - ansincludes only the floor area occupied by the tenant.
Net Lease - ansthe tenant is required to pay all or part of the operating expenses
associated with the real estate.
Percentage Lease - ansa contract that requires a fixed minimum base event based on
volume of business, sales, productivity, or use of the property by the tenant is called
___________
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