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REE 3043 Exam 3 questions with verified answers
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REE 3043 Exam 3 questions with verified answers
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REE 3043 Exam 3 questions with verifiedanswers
Calculate the monthly payment required to fully amortize over 30 years a
$155,000 mortgage loan, assuming the 9% annual interest rate - ✔✔(First
hit 2nd and then P/Y and enter 12 then clear to begin input)
N= 30
I= 9%
Pv=
Pmt= ?
Fv=
1247.16
The value of income-producing property depends on its expected cash flows,
the timing of those cash flows, and the riskiness of the cash flows. - ✔✔True
Real estate investors earn returns on their investments from two basic
components: income from the rental of the property and the tax
sheltering characteristics of real estate. - ✔✔False
Investment "risk" is defined as the probability that actual cash flows will
differ from what was expected. - ✔✔True
Most real estate investors are risk seekers rather than risk averse. - ✔✔false
,The outstanding balance on a mortgage loan can be calculated as the present
value of the remaining payments, discounted at the contract interest rate. -
✔✔True
The investment strategy may be separated into three components -
✔✔Investment policy, investment objectives, and investment policies
Characteristics of income property investment - ✔✔Property
Type-Apartments, hotels, office buildings etc
Rental Income
Purchase as Investors
Geographic Scope
Net sellping price NSP= - ✔✔expected sale price (SP) - selling expense (SE)
a measure of the extent to which NOI can decline before it is sufficient to service
the debt, defined as net operating income over debt service - ✔✔debt
coverage ratio
the percentage of an equity investment returned in cash, before income taxes, for
one year - ✔✔equity dividend rate
the rent that could be obtained by renting a property on the open market
- ✔✔market rent
, the rent specified in the lease contract - ✔✔contract rent
you are considering purchasing a retail building for 5,000,000 (50,000 sq. ft. net
lease area). You expect lease in the first year for $18 per sq ft. Vacancy and
collection losses are expected to be 9 percent of PGI' and operating expenses
45 percent of EGI. What is expected operating income (NOI) for the first year? -
✔✔450,450
You are considering purchasing a retail building for 5,000,000 (50,000 sq. ft. net
lease area). You expect lease in the first year for $18 per sq ft. Vacancy and
collection losses are expected to be 9 percent of PGI' and operating expenses
45 percent of EGI. Using selling price, what is the implied first year overall
capitalization rate ? - ✔✔9.0 Percent
Objective of U.S tax law - ✔✔raise revenue in an efficient and
equitable manner & promotion of economically and socially desirable
activities
Real estate is classified into four categories - ✔✔personal residence,
dealer property, trade/business property, and investment property
Forms of Ownership - ✔✔sole proprietorship, partnership, corporation
Types of Income - ✔✔active income- income earned from salaries,
wages, commissions, fees, and bonuses
portfolio income-interest and dividends, and capital gains from stock, bond, and
other financial security investment
passive activity income- generated from trade and business activities
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