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REAL 4000 UGA EXAM 3 DIETZ QUESTIONS WITH COMPLETE SOLUTIONS.
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REAL 4000 UGA EXAM 3 DIETZ QUESTIONS WITH COMPLETE SOLUTIONS.
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REAL 4000 UGA EXAM 3 DIETZQUESTIONS WITH COMPLETE
SOLUTIONS
rentable ggarea gg- ggAnswer gg=gross ggarea- gg"vertical ggpenetrations" gg(elevators,
ggstairs, ggetc)
usable ggarea gg- ggAnswer gg=rentable ggarea- ggcommon ggareas gg(lobbies,
ggconference ggrooms, ggetc)
Load ggFactor gg- ggAnswer ggrentable/usable ggratio
Estimating ggNOI ggover ggnext ggyear ggformula gg- ggAnswer ggPGI gg
-VC gg
+MI gg
--------
=EGI gg
-OE
-CAPX
---------
=NOI
Operating ggExpenses ggvs. ggCapital ggExpenditure gg- ggAnswer ggOperating
ggExpenses gg(OpEx):
-keep ggproperty ggoperating ggand ggcompetitive gg
-do ggnot ggincrease ggvalue ggor ggextend gguseful gglife gg
-ex: ggminor ggroof ggrepairs, gglawn ggmaintenance, ggutilities
Capital ggExpenditures gg(CapEx): gg
-increases ggmarket ggvalue ggof ggproperty/extend gglife gg
-ex: ggroof ggreplacement, ggair ggconditioner ggreplacement
NOI gg(Net ggOperating ggIncome) gg- ggAnswer gg-money ggthat ggflows ggout ggof ggthe
ggproperty gg
-property's ggexpected gg"dividend"
-projected ggstream ggof ggNOI ggis ggthe ggfundamental ggdeterminant ggof ggvalue
-must ggservice ggthe ggmortgage ggdebt ggand ggprovide ggreturn ggon ggequity ggto ggbe
ggsufficient
, why gginvestors ggborrow gg- ggAnswer gg1. ggLimited ggfinancial ggresources/wealth
gg(cant ggpay ggcash ggup-front) gg
2. ggLeverage ggamplifies ggequity ggreturns gg(& ggrisk) gg(money ggnot ggused gghere
ggcan ggbe gginvested ggelsewhere) gg
3. ggAlso ggpermits ggmore ggportfolio ggdiversification
Before-tax ggcash ggflow gg(BTCF) ggformula gg- ggAnswer ggNOI gg- ggDS gg(Net
ggOperating ggIncome gg- ggsum ggof ggthe ggmortgage ggpayments gg[Debt ggService])
-Capitalization ggRate gg(Cap ggRate) gg(R0)
-Equity ggDividend ggRate gg(EDR) gg(Cash-on-cash ggReturn) gg- ggAnswer ggTwo
ggProfitability ggRatios
-Operating ggexpense ggratio gg
-Loan-to-value ggratio gg(LTV) gg
-Debt ggcoverage ggratio gg(DCR) gg
-Debt ggyield ggratio gg(DYR) gg- ggAnswer ggWhat ggare ggthe ggfour ggfinancial ggrisk
ggratios?
Cap ggrate gg(going ggin) ggformula gg- ggAnswer gg= ggNOI gg(1) gg/ ggAcquisition ggprice
gg
= ggoverall ggincome ggproducing ggability ggof ggthe ggproperty ggor ggone-year ggreturn
ggon ggtotal gginvestment
NOI gg($) ggvs ggCap ggRate gg($) gg- ggAnswer ggNOI: gg
-represents ggthe gg"space ggmarket"
-the ggHIGHER ggthe ggNOI ggthe ggHIGHER ggthe ggprice gg
Cap ggRate:
represents ggthe gg"capital ggmarket"
-the ggHIGHER ggthe ggCap ggRate, ggthe ggLOWER ggthe ggprice
Equity ggdividend ggrate gg(EDR) gg- ggAnswer gg= ggBTCF gg/ ggequity gginvestment gg
-indicates ggthe gginvestor's ggone-period ggrate ggof ggreturn ggon gginvested ggequity
Operating ggexpense ggratio gg(OER) ggformula gg- ggAnswer gg= ggOperating
ggExpenses gg(OE) gg/ ggEffective gggross ggincome gg(EGI)
- ggindicate ggthe ggportion ggof ggrental ggincome ggconsumed ggby ggoperating
ggexpenses
Loan-to-value ggratio gg(LTV) ggformula gg- ggAnswer gg= ggmortgage ggbalance gg/
ggproperty ggvalue gg(acquisition ggprice)
- ggto ggmeasure ggthe ggdegree ggof ggfinancial ggleverage
- ggmeasures ggthe gg% ggof ggthe ggprice gg(or ggvalue) ggencumbered ggby ggthe ggfirst
ggmortgage
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