Oregon Real Estate | Finance - Formulas
Exam Questions and Answers with Verified
Solutions | Latest Updated 2026
NOI Net Operating Income = income left after
operating expenses (before debt + taxes)
NOI Formula EGI − Operating Expenses
EGI Effective Gross Income = actual income
collected after vacancy/losses
EGI Formula PGI − Vacancy & Collection Loss
PGI Potential Gross Income = if every
unit/property paid fully
Cap Rate Investor return based on property
income
Cap Rate Formula NOI ÷ Value
Value (Income Approach) NOI ÷ Cap Rate
Formula
NOI Value Formula Value × Cap Rate
, Cap Rate Intuition Lower cap rate = more expensive
property relative to income
GRM Gross Rent Multiplier = value compared
to RENT only
GRM Formula Value ÷ Rent
Value (GRM) Rent × GRM
Rent (GRM) Value ÷ GRM
GIM Gross Income Multiplier = value
compared to ALL gross income
GIM Formula Value ÷ Gross Income
Loan To Value (LTV) What portion belongs to the BANK /
financed amount
LTV Formula Loan ÷ Value
Loan Amount Formula Value × LTV
Equity Value − Loan
Exam Questions and Answers with Verified
Solutions | Latest Updated 2026
NOI Net Operating Income = income left after
operating expenses (before debt + taxes)
NOI Formula EGI − Operating Expenses
EGI Effective Gross Income = actual income
collected after vacancy/losses
EGI Formula PGI − Vacancy & Collection Loss
PGI Potential Gross Income = if every
unit/property paid fully
Cap Rate Investor return based on property
income
Cap Rate Formula NOI ÷ Value
Value (Income Approach) NOI ÷ Cap Rate
Formula
NOI Value Formula Value × Cap Rate
, Cap Rate Intuition Lower cap rate = more expensive
property relative to income
GRM Gross Rent Multiplier = value compared
to RENT only
GRM Formula Value ÷ Rent
Value (GRM) Rent × GRM
Rent (GRM) Value ÷ GRM
GIM Gross Income Multiplier = value
compared to ALL gross income
GIM Formula Value ÷ Gross Income
Loan To Value (LTV) What portion belongs to the BANK /
financed amount
LTV Formula Loan ÷ Value
Loan Amount Formula Value × LTV
Equity Value − Loan