250,000B. 100,000C. 150,000D. 75,000

Real Estate Math Questions Flashcards An income-producing property has an gross income of $30,000 and expenses of $12,000. The rate of return expected is 12%. What is the value of the property?A.

$250,000B. $100,000C. $150,000D. $75,000

C.Income = Rate x Value$18,000 = 0.12 x VV = $150,000 A property has a potential gross income of $450,000. Fixed and variable operating expenses have been calculated at $112,000 annually. The property is being operated at a vacancy rate of 2% with $4,000 being held in reserve for replacements. If the property sells for $2 million, what is the capitalization rate?A. 14.25%B. 15.65%C. 16.25%D.

17.65%

C.PRI- V&C+ OI-----------= EGI- OE-----------= NOIStack

formula:$450,000 (PGI) x .02 (V&C rate) = $9,000

(V&C)$450,000 (PGI) - $9,000 (V&C) = $441,000

(EGI)$441,000 (EGI) - $112,000 (OE) - $4,000 (R) =

$325,000 (NOI)IRV formula: $325,000 (NOI) ÷ $2,000,000

(Value) = .1625 or 16.25% (cap rate)

Interest only loans:If an interest only loan has monthly

payments of $825 and an interest rate of 5%, what was the original loan balance?A. $156,000B. $165,000C.

$178,000D. $198,000

D.$825 (monthly payment) x 12 months = $9,900 (1 year of payments)$9,900 ÷ .05 (5% interest) = $198,000 (original loan balance) Mary has purchased a home for $120,000 and obtained a loan from a local bank for 75% of the purchase price. She agreed to pay 2 discount points. Mary has placed $2,500 earnest money with the broker. How much money will Mary need at closing to complete the transaction?A. $31,800B.

$30,000C. $29,900D. $29,300

$120,000 x .75 = $90,000 Loan Amount.$90,000 x .02 = $1,800 in Points (Every Point is 1% of Loan Amount).$120,000 x .25 = 30,000 Down Payment$30,000 Down Payment + $1,800 in Points= $31,800 - $2,500.Earnest Money = $29,300 Total to Bring to Closing If you purchased property for 60% of the asking price and later resold the property for 100% of the original asking price, what is your profit?A. 20%B. 33.33%C. 40%D.

66.66%

Made ÷ Paid = Profit Margin40% ÷ 60% = 66.66% Nonhomestead property with an assessed value of $137,500 is sold and the closing takes place on April 12th.If the day of closing is charged to the buyer, how is the proration for taxes listed on the closing statement under the 365 day method if the millage rate is 24 mills?A. $913.15 debit to the seller and $913.15 credit to the buyer.B.$913.15 credit to the seller and $913.15 debit to the buyer.C. $2286.85 debit to the seller and $913.15 credit to the buyer.D. $3,300 debit to the seller and $913.15 credit to the buyer.A.Nonhomestead = no exemptions.$137,500 (assessed value) x .024 (24 mills) = $3,300 (Total tax).$3,300 ÷ 365 days = $9.0411 (daily tax amount).31 (Jan) + 28 (Feb) + 31 (Mar) + 11 (Apr) = 101 seller days.$9.0411 (daily tax) x 101 (seller days) = $913.15 debit to seller and $913.15 credit to buyer

# Lots for a parcel of land:A developer purchases a 65 acre

tract to develop into lots of 8,500 square feet each. How many lots could be developed if roads total 900 feet in length and 30 feet in width and there is a common area of400,000 square feet?A. 250B. 260C. 272D. 282 D.65 acres x 43,560 sq. ft. per acre = 2,831,400 sq. ft.900 ft. x 30 ft. = 27,000 sq. ft (roads)2,831,400 sq. ft. (total) - 27,000 sq. ft. (roads) - 400,000 sq. ft. (common) = 2,404,400 sq. ft. (available for lots)2,404,400 sq. ft.(available) ÷ 8,500 sq. ft. (each lot size) = 282.87 or 282 lotsRound down for the number of full lots

Mrs. Smith sold two 60acre tracts for $2,000 per acre.Profit on one sale was 20%; loss on the other sale was 20%. What was her loss or gain?A. $10,000B. $20,000C.

$30,000D. $40,000

A.$2,000 x 60 = $120,000 Sale Price for each Tract.$120,000 ÷ 1.20 = $100,000 Originally Paid for Tract with 20% Profit$120,000 $100,000 = $20,000 Profit.$120,000 ÷ .80 = $150,000 Originally Paid for Tract with 20% Loss$120,000 $150,000 = ($30,000) Loss.$20,000 $30,000 = ($10,000) Net Loss An apartment complex has 3 apartments rented for $400 each, 6 apartments rented for $360 each, and 6 apartments rented for $350 each. All apartments are rented on a monthly basis with rental payments due on or before the first of each month. If the gross rent multiplier is 55, what is the value of the property?A. $275,000B.

$300,300C. $305,000D. $325,000

B.$400 x 3 = $1,200$360 x 6 = $2,160$350 x 6 = $2,100= $5,460 total monthly rent.$5,460 x 55 GRM = $300,300 property value.Tax Proration QuestionsCredit to the buyer.Debit to the seller.ALWAYS.

IRV Formula:If the net operating income is $65,000 and the

capitalization rate is 6%, which of the following would represent the value of this property?A. $756,733B.

$853,067C. $1,083,333D. $1,115,986

C.Income = Rate x Value$65,000 = .06 x YY = $1,083,333

Ad Valorem Tax:A blind widow has a homestead

exemption on a property with an assessed value of $48,000. If the total millage rate is 22 mills, her annual

taxes would be:A. $484B. $586C. $756D. $1,056

A.Annual taxes = Taxable value x Millage rate.$25,000 (basic) + $500 (widow) + $500 (blind)= $26,000 (total exemptions).$48,000 (assessed value) $26,000 (exemptions)= $22,000 (taxable value).$22,000 (taxable value) x .022 (22 mills) = $484 (annual tax amount)Additional Exemptions- $500 for Widows.- $500 for Blind People.- $5,000 for Veterans.Principal & interest with amortized or level payment

loan:How much of the second loan payment would apply to

principal if the loan was originally $175,000 at 6% over 30 years with a monthly payment of $1,049.21?A. $174.21B.

$175.08C. $874.13D. $875

B.Formula:Principal x Rate x Time (in months) =

Interest.$175,000 (initial loan) x 6% (interest) = $10,500 (12 mo. interest)$10,500 ÷ 12 = $875 (1st month interest)$1,049.21 (payment) $875 (interest part) = $174.21 (1st mo. principal part).$175,000 (original balance) $174.21 (principal paid) = $174,825.79 (new loan balance)$174,825.79 (balance at start of 2nd mo.) x 6% = $10,489.55 (12 mo. interest)$10,489.55 ÷ 12 = $874.13 (2nd month interest)$1,049.21 (payment) $874.13 (interest part) = $175.08 (2nd mo. principal part) A lot measures 240' x 660' and costs $21,780 per acre.What is the cost per square foot?A. $0.30B. $0.50C.

$1.00D. $5.00

B.$21,780 per acre ÷ 43,560 sq. ft. per acre = $.50 Types of Questions(1) Percentage questions include commission, net listing, profit or loss, principal and interest, or interest only computations.(2) Square footage questions include how many lots or what size lot can be developed, and replacement costs.(3) Formula questions include memorizing formulas. They can be comparable sales appraisal questions or specific formulas for IRV, or taxable

values.

Profit or Loss:A property was purchased for $140,000 and

later sold for $156,500. Which represents the profit percentage earned in this transaction?A. 5%B. 8%C.

10%D. 12%

D.Divide what is made by what is paid.$156,500 (purchase price) - $140,000 (sales price)= $16,500 (amount made).$16,500 (amount made) ÷ $140,000 (amount paid) = .117857 or 12%

Size of lot after a setback:A lot measures 165 feet by 165

feet. If there are setbacks on all four sides of 10 feet, what

square footage could be developed on this lot?A. 18,500B..

19,525C. 21,025D. 23,025

C.165 ft. (side length of lot) 20 ft. (10 ft. setback x 2 for each end of side) = 145 ft. (usable side length).145 ft. x