FINAL EXAM REVIEW Champions SAE (Answered) Review Rated 100%

FINAL EXAM REVIEW Champions SAE (Answered) Review Rated 100% Property Manager -- A PM's expected tasks will be spelled out by the management agreement with the property owner. In general, a property manager must be able to wear many different hats and have detailed knowl- edge about all aspects of real estate. As a fiduciary, the property manager (agent) owes the owner (principal) -- • Obedience • Loyalty • Disclosure • Confidentiality Accounting Reasonable care CCIM (gold standard of commercial) -- Expects its members to believe in and promote:ethical leadership, cultural awareness, investment in the future, staying connected,fiscal responsibilty, and acting globally. Must complete educational requirements, and pass a comp exam. Applicants must also submit a Portfolio of Qualifying Experience. International Residential Code (IRC) -- Is the minimum standard code for the State of Texas for one and two family dwellings compromised of three stories or less. (Townhomes less than 3 stories) Supply and demand -- When the demand for real estate is high adn the supply low prices in the market go up. Promotion -- PROMOTION After spending some time getting to know the product, it becomes incumbent upon the property manager, to get the word out on the street - promotion. Price -- PRICE Pricing is a vital element of marketing. The prices of products and services can either attract or repel clients. Do not recommend that landlords price their properties above what the market in their geographic regions can bear. Higher prices will deter tenants Submarkets -- Drilling down even deeper into the neighborhood, will reveal submarkets that exist within the wider neighborhood mar- ket. For example, there be may a submarket in an urban neigh- borhood for luxury high-rises Physical deterioration -- Is the loss in a property's value due to daily wear and tear Functional obsolescence -- Is the loss in tge desirabilty of the style, layout, or function of a property due to age. External obsolescence -- Refers to the loss in value of a property caused by factors outside of the property itself. First step in creating a management plan -- Assess the subject property. 4 P's of marketing -- Product, place, promotion, and price Product -- Marketing sheds light on the following questions: What is the product? Who needs the product? Why do they need the product? How to reach people who need the product? Where to promote the product? Any successful salesperson knows his/her product. Place -- The place is the physical location of the product. Second Level of analysis -- The local market. Signage -- Many renters on the lookout for single family and multi family housing often drive theough their preferred neighborhoods looking for rent signs. Trust Account -- Brokers collecting rents or other funds must go into a separate account Commingling -- Property managers must not commingle. Commingling is the act of mixing a clients funds with a brokers business or personal funds. Economic Occupancy -- Is the percentage of potential rental income to actual earned income over a specified period. General Agent -- An individual has the right to represent a principal in a particular type of transaction or business. Property managers are a common example of the general agency relationship in real estate. Security Deposits -- a refundable amount paid to cover damages to property caused by a tenant Security Deposits -- (1) Broker will: (a) maintain security deposits received from tenants in the trust account described under Paragraph 4A(2); and (b) in accordance with applicable law and the leases for the Property, account to the tenants for the security deposits, make lawful deductions from the security deposits, and return the security deposit balances to the tenants from the trust account. Relationship of the parties -- The broker is an independent contractor, and this does not agreement create a partnership between the and the property manager owner. Debt Service -- The amount of cash needed to repay the loan Break Even Ratio -- BREAK-EVEN The break-even ratio (BE) is a fundamental calculation for all real estate investors when determining a property's value because it lets them know how much income the property must earn in order to break even. The answer will be in the question. Costs of financing -- Many investors do not pay all cash on a real estate deal. Instead, they prefer to spread out their risk by financing real estate purchases so that they do not tie up all of their available cash in any one property. Debt can be the best friend of a real estate investor, at the right interest rate, of course. Investors leverage debt when interest rates are low in order to increase their returns. #49 Communication between managers and tenants -- While the property manager's first duty is to the landlord, maintaining good tenant relations is critical. The manager must be firm and professional in enforcing the rules of the property and always keep communications with tenants open. While the tenant relationship is vital, it is essential to remember that it is a professional relationship. It should never become so personal that it compromises the manager's ability to enforce lease terms or building rules. Decreasing Rent -- PMs may also reduce rents if property's condition is distressed, an area is overbuilt or falls out of favor with renters, or area demographics change. Enticing Tenants To Renew Lease -- Offer incentives, stagger the rental increase over term of the lease, lock in their current rate, respond to maintenance requests promptly, and offer improvements or upgrades. JP Court Eviction -- In addition to the eviction suit, a suit for rent may be filed if it is under 10,000 Mediation -- Management can obtain the services of an independent mediator who will listen with an unbiased ear to both sides of the story, and will hopefully help management and tenant come to an alternative agreement to keep the dispute out of the courts. Mediation typically takes place on "neutral ground" and involves both parties meeting with the mediator and discussing their respective sides of the issue at hand. Lease In Writing -- Leases in over a certain duration must be in writing in most states in order to comply with the Statute of Frauds. In Texas, a lease for more than one year must be in writing to comply with the Statute of Frauds. Constructive Eviction -- A lease may be discharged under the concept of constructive eviction. Constructive eviction occurs when the landlord does something or fails to perform some obligation under the lease that renders the leased premises uninhabitable. Constructive eviction may occur because the landlord failed to maintain the roof, or failed to provide water and/or sewer services to unit. Lease Option -- A lease option allows a tenant to buy the property at a preset price and terms for a given period. A lease option can also be called lease with an option to buy. Access By Landlord -- The landlord, PM, or other rep of the landlord are authorized to access the property. Repairs -- Tenants must understand that if they are behind on the rent, then the landlord is NOT obligated to make any requested repairs. How many days is a reasonable period of time for the landlord to make a dilligent effort to repair -- 7 days Market rate cooperative -- A market rate cooperative allows members to sell their units at their market value, retaining their equity in the investment. Such as a condo. Proprietary Lease -- A proprietary lease grants the member-owner, who is a share- holder in the corporation, the right to occupy a specific dwelling unit in the building and to make use of the property's common areas. Condominiums -- Established under laws referred to as horizontal property acts. Nursing Home Reform Act 1987 -- Homes that receives funds from Medicare or Medicaid must comply with all federal regulations. Capital Advances -- Advances made to nonprofit entities under the section 202 program do not have to ve repaid as long as the project continues to serve the very low income elderly for 40 years Student Housing -- Disadvantages of managing is the high turn over rate Office Buildings -- Categorized by location, quality, and size. Advertising -- Typically involves the hard costs associated with marketing. Companies spend exorbitant amounts of money on billboards, magazine and newspaper ads, banner ads, flyers, brochures, television and radio com- mercials, and mailers to advertise the products that they offer. If the rent in an office building is $24.00 per square foot, what is the monthly rent on a space having 4000 square feet? -- 4000x24=$96,000 then 96,000 divided by 12=$8000 per month NNN Lease -- Due to inflation, the rising cost of insurance, and high property taxes, gross leases fell out and were replaced by Commercial Lease -- here are TREC-promul- gated leases to protect tenants, and commercial leases are created with a bias toward the landlord; the landlord always wins. Lawyer writes. LOI -- Agents often use the Letter of Intent (LOI) for leases and purchases.This letter is not a binding agreement. ADA Penalties -- First violation $75,000 and Second $150,000 VAWA -- In 1994, Congress passed the Violence Against Women Act of 1994 (VAWA). Congress reauthorized the VAWA in 2000, 2005, and 2013 as landmark federal legislation, helping to protect the rights victims including, victims of domestic violence, dating violence, sexual assault, and stalking; however, it applies mainly to the victims of domestic violence in public housing or who receive housing assistance or vouchers from housing programs. It does not apply to private housing that does not receive federal rental assistance. Lead Based Paint -- Houses built prior to 1978 are required under the Residential Lead Bases Paint Hazard Reduction Act of 1992 to provide certain info before renting, buying, or renovating. SCRA -- Is a federal law enacted in 2003 that protects members of the military branchs and reservists who must report for active duty. The law extends beyond protections for rental agreements, security deposits, prepaid rent, and eviction, to cover install- ment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosure, civil judicial proceedings, automobile leases, life insurance, health insurance, and income tax payments. The pro- tections start on the date active duty begins and terminates around 30 to 60 days after the military person has been discharged from active duty. Seasonal Maintenance -- Maintenance performed at certain times of the year. (Christmas trees) Maintenance Request Steps -- Scope of task-what is it, location-where is it, priority-emergency or non-emergency, methodology-is it on site or contractor, materials-types needed also onsite or contractor, who will be sent, and time frame. Look for the one that isn't on here. General Contractor -- Sometimes called the prime contractor will manage the entire project from start to finish including scheduling, placing orders for materials and making sure they show up, managing the subcontractors like electricians, and plumbers, ensuring that work is taking place within the projected timelines. Risk Assessment -- Identify and quantify potential hazards, calculate the cost of measures of loss control, provide an inventory of comoany assets, and maximize return on an investment. ROI Risk Control Costs -- Policies and procedures in place to control risk are considered risk control costs. For example, each applicant for an apartment must undergo thorough screening before their application is accepted. These costs might include credit check fee, criminal background check fee, and the hourly cost of an employee who calls applicants' former landlords and double-checks rental and employment histories. The process is in place to reduce and control the risk of renting an apartment to the wrong tenant. The costs of these controls are usually transferred to the applicant in the form of application fees. Mold Policies -- Also, an owner, or a managing agent or employee of an owner, is not required to be licensed to perform mold assessment or mold remediation on a residential property which is owned by that person, and which has fewer than 10 residential dwelling units. This exemption applies regardless of the total surface area within the residential property that is affected by mold growth. Controlled Access -- Whether it is as sophisticated as a biometric scanning identification system, or as simple as a member of the security team who checks visitors in and out of the building, controlling who can access the property and when is an effective way to prevent crime. Controlled access a critical measure to take ensure the safety of tenants. Sound Visitor MGMT System -- Should require visitors to: present a current picture id like dl, give valid reason for their visit, and give contact number or email address. EAP -- Management companies should have an Emergency Action Plan (EAP) that addresses response procedures for all types of situations, including fires, natural disasters, and terrorist/active shooter attacks. PASS -- Pull, aim low, squeeze lever, and sweep the nozzle side to side. The National Fire Prevention Association provide safety tips. RACE -- Rescue, Alarm, Confine, and Extinguish. Used acronymns to train individuals on how to deal with a fire emergency. Open carry on college campuses -- Open carry is prohibited on college campuses. It is legal in Texas to conceal carry on four- year public university campuses as of 2016. This is commonly called "campus carry." Licensed students may bring a concealed handgun into campus buildings, classrooms, and dorms; however, the individual campuses may create their own rules about where to prohibit firearms. Budget -- Maintenance (routine/non routine), Payroll , Management fees, Marketing/Advertising , Utilities ,Taxes, Debt Service, Repairs, and Reserves Physical Occupancy -- The calculation of the property's occupied units. Divide the occupied units by the property's total units. Example 140 divided by 149