Foundations Of Real Estate Financial Modelling 2nd Edition Roger Staiger - Solutions

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What happened to downtowns as transportation networks allowed people to move farther and farther out of the city?
Discuss the role of the railroads in land development.
Describe the evolution of slums.
What is the balloon-frame method of construction, and what effect did it have on residential development?
Who was Llewellyn Haskell?
What effect did private deed restrictions and public controls have on real estate in the 19th century?
What was the Holland Land Company noted for?
Describe the fee simple system of private ownership.
How was public land put into private ownership?
How does the eight-stage model help the developer think about assembling the right team for a particular development?
Describe the various types of financial players and when they are involved in the development process.
Why are appraisers involved before, during, and at project completion?
Why do developers need environmental and transportation consultants more often now than 20 years ago?
Describe the expanded role of the landscape architect.
Why are contractors critical to the developer’s work?
Why might development of a mixed-use project be more difficult than development of a single property type?
Describe the architect’s role in the development process.
What are the most common forms of compensation for developers?
What portion of land in the United States is developed?
How will the significant growth in the “Professional and Business Services” and the“Health Care and Social Assistance” employment sectors affect the demand for real estate?
How might the housing market be affected by a population in which less than 30 percent of all households have children under the age of 18?
How does the aging baby boom generation affect the population pyramid?
How significant is the construction industry to the nation’s overall economy?
Why is it important for real estate players to stay well informed about trends?
How does employment growth influence the demand for commercial space?
How does immigration affect demand for real estate?
Describe the anticipated changes in the composition of the U.S. population.
Why is real estate so important to the U.S. economy?
Why have U.S. developers looked outside the country for development opportunities?
Why is ownership of real estate more attractive in the United States than in many other countries?
What role does time play in the real estate development process?
Discuss the many roles a developer must play.
Discuss the importance of good design in development.
Why and how do developers use market research and feasibility studies?
Why is real estate development inherently an interdisciplinary process?
What are the advantages of using such a model? What are the pitfalls?
What are the eight stages of development as delineated in this textbook?
What is the role of the developer in the development process?
Why does every real estate development project involve both the public and the private sectors?
What is real estate development?
The investor invests $45,000 into an account that pays 4%/year compounded monthly. At the end of 4 years, what is the balance of the account? LO1
The investor invests $25,000 into an account that pays 5%/year compounded semi-annually.At the end of 3 years, what is the balance of the account? LO1
The investor invests $10,000 into an account that pays 6%/year compounded quarterly. At the end of the year, what is the balance of the account? LO1
An investor realizes the market value of a property is $798,000. The investor purchased the property 8 years ago for $530,000. What is the investor’s annual rate of return for the 8 years held? LO1
An investor purchases an asset for $450,000 and expects the market to return 6.00%/year for 10 years. What is the investor’s final sale price for the asset at the end of 10 years? LO1
An investor invests $50,000 in an insurance product that is guaranteed to return $75,000 in 2 years. What is the annual rate of return for the product? LO1
Jason invests in tax credits that accrue annual interest at 18.00%. He invests $20,000 and expects full repayment at the end of the 24th month. What will Jason’s payment be at the end of month 24? LO1
Lena lends $15,000 to her daughter to purchase a car but expects to be repaid in 3 years. Lena expects her daughter to pay her 3.00% annual compounded return. What will Lena’s daughter owe at the end of 3 years? LO1
Chandler invests $25,000 for 10 years in a financial product with a guaranteed compounded annual return of 4.00%. What is Chandler’s account balance at the end of 10 years? LO1
Ayla has borrowed $75,000 @ 6.00% for 6 years. How much interest has accrued over the 6 years and what is the total outstanding balance assuming no principal pay down and simple interest calculation? LO1
Assuming there was no principal pay down during the 5 years, what is the ending balance for John, see problem #1, at the end of 5 years? LO1
John has borrowed $50,000 @ 5.00%/year for 5 years. How much interest has accrued at the end of 5 years if using simple interest? LO1
A 12-month loan with principal balance of $11,500 and structured as a CPM style amortization having 6.50% fixed interest will cause the borrower to pay how much in total payments over the life of the loan on a pre-tax basis?
A 12-month loan with principal balance of $7,550 and structured as a CPM style amortization having 4.50% fixed interest will cause the borrower to pay how much in principal on a pre-tax basis?
A 12-month loan with principal balance of $2,500 and structured as a CPM style amortization having 6.00% fixed interest will cause the borrower to pay how much in interest on a pre-tax basis? (Note: Interest on loans in the U.S. is tax deductible. Therefore, the actual “cost” can be
Under the debt financing alternative, only $100,000 is required at CF0 and the project will provide an annual return after debt service of $18,000 for each of the 5 years. In addition, the reversion of the property returns is $65,000 after debt service at year 5 as well. What are the IRRs of both
A small multifamily rental property can be funded with either 100% equity or 100% debt financing. Under the equity option, the property will require $550,000 of capital in CF0 and return annual payments of $30,000 for the next 5 years until it is sold for $625,000 in year
An investor is considering purchasing a four-unit multifamily but is limited on capital. The individual has $125,000 and the purchase price is $625,000. The individual has a commitment from a local lender to fund the difference (assume no transaction costs and/or inefficiencies).The lender will
Determine the sales price for a property with an expected NOI of $26,000 and a cap rate of 9.00%.a) $288,880b) $276,888c) $288,889d) $288,276
Determine the NOI for a property with a capitalization rate of 5.50% and a sales price of$1,000,000.a) $55,000b) $50,000c) $60,000d) $50,500
Determine the capitalization rate for a property with a sales price of $400,000 and an expected Net Operating Income (NOI) of $18,000 in the year following the property’s sale.a) 4.25%b) 4.62%c) 4.50%d) 4.45%
For the scenarios listed above, what is the IRR (or XIRR) for these cash flows if returned on a monthly as opposed to an annual basis, i.e. 31 Dec 2021, 31 Jan 2022, 28 Feb 2022, and 31 Mar 2022?a) 74.86%, 90.38%b) 70.80%, 84.37%c) 81.00%, 80.90%d) 71.87%, 81.75%
Calculate the IRR for the following project. An outflow of $14,000 in year 0 was followed by an inflow of 0 for 2 years with $16,000 returned in the third year. How does this change if the cash flows are now $10,000 in year one, $4,000 in year two, and $1,000 in year three.a) 4.55%, 3.74%b) 4.55%,
Assume a project has a net income of $70,000, the project has operating expenses of $40,000 and a debt service of an additional $38,000 annually. New management means to cut cost to current expenses while also refinancing the property to reduce monthly payments. What happens to the Revenue, the Net
An office space located within the Dallas Fort-Worth Metroplex currently maintains an annual revenue of $150,000. Operating expenses are $40,000 and the property’s annual debt service is $60,000. In two years the management company will renegotiate their lease. They anticipate that 60% of the
Assume a project has a CF0 of $200,000. The investment is expected to generate $5,000 annually for the next 10 years followed by a return of the principal investment, $200,000. If the cost basis is reduced by 25%, what is the relationship on the cash flows? What is the effect on project yield?a)
A project with an outflow of $50,000 in year 0 followed by an inflow of $10,000, $8,000,$12,000, and $46,000 has an IRR of_____. Assume there is a reduction in the CF0 by $10,000.The IRR is now______.a) 2.84%, 8.61%b) 12.76%, 2.84%c) 5.33%, 7.54%d) 8.6%, 12.76%
Assuming 25,000 dollars are invested today, next year 2,500 dollars are returned and in the second year the full 25,000 returned. What is the IRR of this series of cash flows? Assuming that 2,500 is invested in a government T-bill with a one-year maturity and a rate of 0.77%, what is the MIRR of
Assuming 100,000 dollars are invested today, for the next three years 12,000 dollars are returned annually and in the fourth year a lump sum of 80,000 dollars is provided. What is the IRR of this series of cash flows? Assuming a reinvestment rate of 15%, what is the MIRR of this cash flow?a) IRR:
Calculate the IRR for a project with $10,000 dollars of initial cash outflow followed by three years of $2,500 cash flows and a single lump sum inflow in the final year of $6,000. (Hint:this is an annuity, final year annuity payment is grouped in with final cash flow.)a) 13.3%b) 12.3%c) 14.7%d)
Calculate the IRR for the following project. An outflow of $14,000 in year 0 followed by an inflow of $6,000, $7,000, and $7,000 in one-year increments.a) 12.5%b) 18.5%c) 20.0%d) 19.6%
What change to NPV occurs when the discount rate for both problems is reduced by half?a) $4,526.10/$2,123.21b) $4,464.10/$2,130.19c) $4,464.12/$2,130.19d) $4,526.12/$2,123.21
Calculate the NPV for the following project. A outflow of $10,000 dollars followed by an inflow for three years of $2,500 and a single inflow in the final year of $6,000 with a cost of capital of 9%. (Hint: this is an annuity, final year annuity payment is grouped in with final cash flow.)a)
Calculate the Net Present Value (NPV) for the following project. An outflow of $14,000 in year 0 followed by an inflow of $6,000, $7,000 and $7,000 in one-year increments with a discount rate of 8%.a) $4,371.21b) $3,712.21c) $3,426.83d) $3,113.75
How has it changed since the Financial Crisis? Using current indices, what is the current lead/lag between price changes when comparing commercial and residential real estate? Complete a graphic demonstrating the change and describe what this means for the broader economy
What is the approximate size of commercial and residential real estate in the U.S. and your respective country?
What are the relative sizes of the major asset classes in the U.S. and your respective country currently? How have they changed since 2010, i.e. a low point of the Financial Crisis?
What Is Real Estate?
What are the Returns and Risks currently for the different asset classes?
What is the P(Gain) for each?
What does the time series state when graphing from the Financial Crisis to the current day for each of the asset classes?
Graph the residential and commercial year-over-year time series. Does residential lead commercial? By how many months? Is the relationship statistically significant?
Compare the average returns for equity, debt and the major real estate asset classes for the last 5-, 10-, and 15-year periods. The asset classes are equity (S&P 500), debt (VBMFX), office, retail, apartment, Total National Commercial (US), Composite-10 (Case-Shiller), and Composite-20
Calculate and graphically demonstrate the risk of each asset; see above.
Calculate the P(Gain) of each asset class (see above) and compare each. Which is most efficient?
Graph the returns for residential and commercial on a time series. Does there appear to exist a lead/lag relationship? If so, by how many months? Is the relationship statistically significant?
John has borrowed $50,000 at 5.00%/year for five years. How much interest has accrued at the end of five years if using simple interest?
Assuming there was no principal pay down during the five years, what is the ending balance for John (see problem #1) at the end of five years?
Ayla has borrowed $75,000 at 6.00% for six years. How much interest has accrued over the six years, and what is the total outstanding balance assuming no principal pay down and simple interest calculation?
Chandler invests $25,000 for 10 years in a financial product with a guaranteed compounded annual return of 4.00%. What is Chandler’s account balance at the end of 10 years?
Lena lends $15,000 to her daughter to purchase a car but expects to be repaid in three years. Lena expects her daughter to pay her 3.00% annual compounded return. What will Lena’s daughter owe at the end of three years?
Jason invests in tax credits that accrue interest at 18.00%. He invests $20,000 and expects full repayment at the end of the 24th month. What will Jason’s payment be at the end of month 24?
An investor invests $$50$,000 in an insurance product that is guaranteed to return $$75$,000 in two years. What is the annual rate of return for the product?
An investor purchases an asset for $450,000 and expects the market to return 6.00%/year for 10 years. What is the investor’s final sale price for the asset at the end of 10 years?
An investor realizes the market value of a property is $$798$,000. The investor purchased the property eight years ago for $$530$,000. What is the investor’s annual rate of return for the eight years held?
The investor invests $10,000 into an account that pays 6%/year compounded quarterly.At the end of the year, what is the balance of the account?
The investor invests $25,000 into an account that pays 5%/year compounded semiannually.At the end of three years, what is the balance of the account?
The investor invests $45,000 into an account that pays 4%/year compounded monthly.At the end of four years, what is the balance of the account?
A loan with principal balance of $2,500 and structured as a CPM-style amortization having 6.00% fixed interest will cause the borrower to pay how much in interest on a pretax basis? (Note: Interest on loans in the United States is tax deductible. Therefore the actual “cost” can be significantly
A loan with principal balance of $7,550 and structured as a CPM-style amortization having 4.50% fixed interest will cause the borrower to pay how much in principal on a pre-tax basis?

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Foundations Of Real Estate Financial Modelling 2nd Edition Roger Staiger - Solutions

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