IAAO Course 102
4 Methods of Financing Real Estate - ANS-1. Cash
2. Trust Deed
3. Land Contract
4. Mortgage
4 matters When Comparing Rental Property Leases - ANS-1. Effective date of lease
2. Location of assets
3. Physical characteristics
4. Terms of hire
4 types of reimbursement for Mortgages - ANS-1. Amortized - fixed fee
2. Straight Mortgage - brief time period
three. Partially amortized - balloon price
4. Reverse loan - low interest, for seniors
4 Variables that Affect Mortgage Payment - ANS-1. Amount borrowed
2. Interest charge
three. Term of loan
four. Frequency of pmt
5 Sources of Rental Income Data - ANS-1. Property managers
2. Tenants of similar residences
three. Public record
four. Real property brokers
five. Internet
5 Units of comparison for condo residences - ANS-1. Unit
2. Room
three. Space
four. Sq Ft
five. GIM
nine Factors Influencing Investor Decisions - ANS-1. Time
2. Safety
3. Liquidity
four. Income tax blessings
5. Appreciation
6. Management
7. Size
, 8. Collateral
9. Leverage
Band of Investment Method Land & Bldg Method - ANS-(Land Rate x %) + (Bldg Rate x %)
Band of Investment Mortgage and Equity Method - ANS-(Mortgage Rate x Mortgage %) +
(Equity Rate x Equity Percent)
-Mortgage Rate = Found in tables, column 6; multiply by means of 12
Chattel Mortgage - ANS-a mortgage on non-public property given as protection for the charge of
an responsibility
Comparative Sales Method - ANS-Net Income/Sales Price (use IRV)
Construction Loan - ANS-A short-term, intervening time mortgage for financing the value of
creation. The lender makes bills to the builder at periodic durations because the paintings
progresses.
Contract Rent - ANS-the hire special inside the hire agreement
Debt Coverage Ratio Method - ANS-Ro = DCR x M x Rm
DCR = Net Operating Income (NOI)/Annual Mortgage Pmt (Im)
M = Loan to Value Ratio
Rm = Mortgage Capitalization Rate
Deficit Rent - ANS-The ensuing difference whilst the market hire exceeds the contract lease
Economic rent - ANS-The lease that could be received by using renting a property on the open
market. AKA Market hire.
Effective Gross Income (EGI) - ANS-EGI = PGI - V&C + Miscellaneous Income
Effective Rent - ANS-Rental profits after deductions for financial concessions which includes
no-rent intervals at some point of a lease time period.
Effective Tax Rate Formula - ANS-EAT Triangle - ETR = Assessment Level x Tax Rate
Excess Rent - ANS-the amount by means of which contract lease exceeds marketplace lease at
the time of appraisal
First Mortgage (traditional) - ANS-A loan that is neither insured nor assured through the federal
authorities.
4 Methods of Financing Real Estate - ANS-1. Cash
2. Trust Deed
3. Land Contract
4. Mortgage
4 matters When Comparing Rental Property Leases - ANS-1. Effective date of lease
2. Location of assets
3. Physical characteristics
4. Terms of hire
4 types of reimbursement for Mortgages - ANS-1. Amortized - fixed fee
2. Straight Mortgage - brief time period
three. Partially amortized - balloon price
4. Reverse loan - low interest, for seniors
4 Variables that Affect Mortgage Payment - ANS-1. Amount borrowed
2. Interest charge
three. Term of loan
four. Frequency of pmt
5 Sources of Rental Income Data - ANS-1. Property managers
2. Tenants of similar residences
three. Public record
four. Real property brokers
five. Internet
5 Units of comparison for condo residences - ANS-1. Unit
2. Room
three. Space
four. Sq Ft
five. GIM
nine Factors Influencing Investor Decisions - ANS-1. Time
2. Safety
3. Liquidity
four. Income tax blessings
5. Appreciation
6. Management
7. Size
, 8. Collateral
9. Leverage
Band of Investment Method Land & Bldg Method - ANS-(Land Rate x %) + (Bldg Rate x %)
Band of Investment Mortgage and Equity Method - ANS-(Mortgage Rate x Mortgage %) +
(Equity Rate x Equity Percent)
-Mortgage Rate = Found in tables, column 6; multiply by means of 12
Chattel Mortgage - ANS-a mortgage on non-public property given as protection for the charge of
an responsibility
Comparative Sales Method - ANS-Net Income/Sales Price (use IRV)
Construction Loan - ANS-A short-term, intervening time mortgage for financing the value of
creation. The lender makes bills to the builder at periodic durations because the paintings
progresses.
Contract Rent - ANS-the hire special inside the hire agreement
Debt Coverage Ratio Method - ANS-Ro = DCR x M x Rm
DCR = Net Operating Income (NOI)/Annual Mortgage Pmt (Im)
M = Loan to Value Ratio
Rm = Mortgage Capitalization Rate
Deficit Rent - ANS-The ensuing difference whilst the market hire exceeds the contract lease
Economic rent - ANS-The lease that could be received by using renting a property on the open
market. AKA Market hire.
Effective Gross Income (EGI) - ANS-EGI = PGI - V&C + Miscellaneous Income
Effective Rent - ANS-Rental profits after deductions for financial concessions which includes
no-rent intervals at some point of a lease time period.
Effective Tax Rate Formula - ANS-EAT Triangle - ETR = Assessment Level x Tax Rate
Excess Rent - ANS-the amount by means of which contract lease exceeds marketplace lease at
the time of appraisal
First Mortgage (traditional) - ANS-A loan that is neither insured nor assured through the federal
authorities.
