Real Estate Principles A Value Approach 5th edition David C Ling, Wayne Archer - Solutions

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A 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 loan with principal balance of $2,500 and structured as a IO-style amortization having 6.00% fixed interest will cause the borrower to pay how much in interest on a pre-tax basis?
A loan with principal balance of $7,550 and structured as a IO-style amortization having 4.50% fixed interest will cause the borrower to pay how much in principal on a pre-tax basis?
A loan with principal balance of $11,500 and structured as a IO-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 loan with principal balance of $2,500 and structured as a Custom Amortizing style amortization having 6.00% fixed interest will cause the borrower to pay how much in interest on a pre-tax basis? The Amortization Structure for the 12 periods is 0.00%, 0.00%, 2.50%, 2.50%, 2.50%, 2.50%, 10.00%,
A loan with principal balance of $7,550 and structured as a Custom Amortizing style amortization having 4.50% fixed interest will cause the borrower to pay how much in principal on a pre-tax basis? The Amortization Structure for the 12 periods is 0.00%, 0.00%, 0.00%, 0.00%, 5.00%, 5.00%, 10.00%,
A loan with principal balance of $11,500 and structured as a Custom Amortizing 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? The Amortization Structure for the 12 periods is 0.00%, 0.00%, 0.00%,
A loan with principal balance of $8,750 and 6.00% fixed interest is considered. The analyst must consider each of the three basic loan structures, i.e. CPM, IO, and Custom Amortization. What is the total interest paid with each structure? What are the total payments? What is the payment in the
A loan with principal balance of $12,550 and 4.25% fixed interest is considered. The analyst must consider each of the three basic loan structures, i.e. CPM, IO, and Custom Amortization. What is the total interest paid with each structure? What are the total payments? What is the payment in the
A loan with principal balance of $22,500 and 7.75% fixed interest is considered. The analyst must consider each of the three basic loan structures, i.e. CPM, IO, and Custom Amortization. What is the total interest paid with each structure? What are the total payments? What is the payment in the
A loan with principal balance of $650,000, 25 years, and 5.25% fixed interest. The analyst must consider each of the three basic loan structures, i.e. CPM, IO, and Custom Amortization. There is no Interest Only period. What is the total interest paid with each structure? What are the total
A loan with principal balance of $725,000, 20 years, and 5.75% fixed interest. The analyst must consider each of the three basic loan structures, i.e. CPM, IO, and Custom Amortization. There is a 12-month Interest Only period. What is the total interest paid with each structure? What are the total
A loan with principal balance of $1,025,000, 30 years, and 5.75% fixed interest. The analyst must consider each of the three basic loan structures, i.e. CPM, IO, and Custom Amortization. There is a six-month Interest Only period. What is the total interest paid with each structure? What are the
Tommy has two loan alternatives: (1) $$700$,000 at a fixed rate of 4.00% for 25 years or (2) $$800$,000 at a fixed rate of 5.00% for 25 years. What is the incremental cost of borrowing (Must show all work and the HP-12C keystrokes.)
Alan purchased his home for $100,000 at a 5.0% interest rate. What is the payment if he amortized the loan over two (2) years? (Must complete by hand showing all work.)
James has a mortgage balance of $200,000 on his home. He just refinanced with the following terms: (1) 3.55% fixed rate and (2) 25-year amortization/term. What is his monthly payment? (Must show HP-12C keystrokes.)
If Grant pays $$5$,000/month instead of the minimum payment required, how many months will it take him to pay off a $$400$,000 mortgage at an interest rate of 3.0% for 30 years? (Must show HP-12C keystrokes.)
A $850,000 mortgage is financed using a 30-year constant payment product at 3.50% interest. Assuming that the loan is held to maturity, i.e., the house is paid off, without any refinancing, in 30 years, what percentage of the total payments go to Wall Street versus Main Street? (Must show HP-12C
It is 22 April 2015 and you are completing your taxes, albeit late, for 2014. You purchased your house for $600,000 on 1 January 2010 and financed 80% at 5.0% for 30 years using a constant payment mortgage. What is your total interest deductible in 2014? (Must show HP-12C keystrokes.)
Carrie Mathison is considering purchasing a home for $$150$,000 and flipping it in three years. The expected rent is $$1$,200/month and expenses are $$200$/month. Ms. Mathison anticipates a rental increase of 2.0% per year, an expense increase of 2.0% per year, and a terminal cap rate in year
Saul Berenson is considering purchasing a home for $$350$,000 and flipping it in four years. The expected rent is $$4$,000/month and expenses are $$1$,000/month. Mr. Berenson anticipates a rental increase of 3.0% per year, an expense increase of 3.0% per year, and a terminal cap rate in year
Peter Quinn is considering purchasing a home for $$200$,000 and flipping it in three years.The expected rent is $$2$,000/month and expenses are $$100$/month. Mr. Quinn anticipates a rental increase of 2.0% per year, an expense increase of 3.0% per year, and a terminal cap rate in year 3 of
Nick Brody is considering purchasing a home for $$600$,000 and flipping it in four years.The expected rent is $$3$,500/month and expenses are $$750$/month. Mr. Brody anticipates a rental increase of 2.0% per year, an expense increase of 2.0% per year, and a terminal cap rate in year 4 of 6%.
Jessica Brody is considering purchasing a home for $$200$,000 and flipping it in three years. The expected rent is $$1$,500/month and expenses are $$150$/month. Mrs. Brody anticipates a rental increase of 2.0% per year, an expense increase of 2.0% per year, and a terminal cap rate in year 3
The current model, as constructed, has a Leveraged IRR = 27.66%. If the Sales Velocity is adjusted to “1.00”, indicating that each unit type shifts the start date by 30 days, how does the Leveraged IRR change?
If the Sales Velocity is then adjusted to 5.00, indicating that each unit type shifts 150 days, i.e. 30 × 5, how does the Leveraged IRR Change?
As the new developer for this project, your goal is to select the option that maximizes returns and convinces the lender to sell the project to you and stay in the deal financing 80% of cost, convince the builder to execute a lot takedown agreement with a builder deposit (to be used as equity) and
The final parcel in the financial district has been placed for sale. It was owned by an old Chicago family who is now looking to cash in on real estate holdings. The sale has been approved by the circuit court and the price agreed by the estate. As soon as probate concludes, fourth quarter 2019,
What is the current ratio for the period 5?a 1.96 b 2.02 c 2.15 d 2.23
What is the cash ratio for period 14?a 0.42 b 0.56 c 0.81 d 0.92
What are the Days Sales Outstanding for Year 3?a 29.85 b 29.94 c 30.02 d 30.14
What is the Total Asset Turnover for Year 6?a 0.17 b 0.21 c 0.23 d 0.25
What is the Working Capital Turnover for Year 5?a 1.22 b 1.27 c 1.31 d 1.33
What is the Total Debt for period 18?a 0.56 b 0.59 c 0.65 d 0.67
What is the Debt/Equity ratio for period 27?a 1.94 b 2.05 c 2.09 d 2.14
What is the DSCR for period 48?a 2.79 b 2.84 c 2.92 d 2.97
What is the Gross Profit Ratio for year 6?a 0.39 b 0.42 c 0.47 d 0.51
What is the Net Income to Sales ratio for year 3?a 0.11 b 0.14 c 0.18 d 0.21
What is the RoA for year 8?a 0.02 b 0.03 c 0.04 d 0.05
What is the RoE for year 7?a 0.09 b 0.10 c 0.11 d 0.12
a Utilizing the information from question 6a, find the coefficient of variation and the z-score.question 6a,Define risk for a project with a (1) best case scenario providing a 20% return and a 10% probability, (2) a most likely scenario consisting of a 12% IRR and a 70%probability of occurring, and
A project with an outflow of $$50$,000 in year 0 followed by inflows of −$$10$,000, $$8$,000, $$12$,000 and $$46$,000 has an IRR of _____. Assume there is a reduction in the CF0 by $$10$,000. The IRR is now _____.a 2.84%, 8.6%b 12.76%, 2.84%c 5.33%, 7.54%d 8.6%, 12.76%
Assume a project has a CF0 of $$200$,000. The investment is expected to generate $$5$,000 dollars annually for the next ten years followed by a return of the principal investment, $$200$,000. If the cost basis is reduced by 25%, what is the relationship to the cash flows? What is the effect
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 $$60$,000. In two years the management company will renegotiate their lease. They anticipate that
Assume a project has a Net Income of $$70$,000, the project has operating expenses of $$40$,000 and a debt service of an additional $$38$,000 annually. New management find means to cut cost to current expenses while also refinancing the property to reduce monthly payments. What happens to the
Calculate the IRR for the following project. An outflow of $$14$,000 in year 0 followed by an inflow of 0 for two years with $$16$,000 returned in the third year. How does this change if the cash flows are now $$10$,000 in year 1, $$4$,000 in year 2, and $$1$,000 in year 3?a 4.55%, 3.74%b
For the scenarios listed above, what is the IRR (or XIRR) for these cash flows if returned on a monthly as opposed to annual basis?a 74.86%, 90.38%b 70.8%, 84.37%c 81%, 80.9%d 70.8%, 80.9%
Determine the Capitalization Rate for a property with a sales price of $$400$,000 and an expected Net Operating Income (NOI) of $$18$,000 in the year following the property’s sale.a 4.25%b 4.62%c 4.5%d 4.45%
Determine the NOI for a property with a Capitalization Rate of 5.5% and a sales price of $$1$,000,000.a $$55$,000 b $$50$,000c $$60$,000 d $$50$,500
Determine the sales price for a property with an expected NOI of $$26$,000 and a Capitalization Rate of 9%.a $$288$,880 b $$276$,888c $$288$,888 d $$288$,276
An investor is considering purchasing a 4-unit multifamily but is limited on capital.The individual has $$125$,000 and the purchase price is $$625$,000. The individual has a commitment from a local lender to fund the difference (assume no transaction costs and/or inefficiencies). The lender
A small multifamily rental property can be funded with either 100% equity or 100% debt financing. Under the equity option, the property will require $$550$,000 of capital in CF0 and return annual payments of $$30$,000 for the next four years until it is sold for $$625$,000 in year 5. Under
Assume a project has a CF0 of $$100$,000. The investment is expected to generate $$5$,000 annually for the next four years followed by a return of the principal investment, $$100$,000. If the annual interest is 6.5% and the Loan-to-Value on this investment is changed from 30% to 85%, what is
A small multifamily rental property is being acquired for $$1.5$ million at 65% Loan-to-Value. The current products offered are a CPM note for 5.85% annual interest over a 30-year term and a variable rate loan that has a five-year initial interest rate of 5.25% before it is adjusted. Based upon
Assuming we are examining the project described in the question above, what is the difference between the total interest payments at the end of the loan’s life span? What rate would the fixed income rate require to remain commensurate with the variable rate’s five-year interest rate increases?a
What strategy provides a contract to buy an asset for a certain price at a later date for the cost of a premium?a Long call b Short call c Short put d Long put
What strategy enables an individual to hedge against future risk by agreeing to a price today?a Long future b Short future c Long call d Short call
Calculate the 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 $$4$,371.21 b $$3$,712.21 c $$3$,426.83 d $$3$,113.75
Calculate the NPV for the following project. An outflow of $$10$,000 followed by an inflow for three years of $$2$,500 and a single inflow in the final year of $$6$,000 with a cost of capital of 9%. (Hint: this is an annuity, final year annuity payment is grouped in with final cash flow.)a
What change to NPV occurs when discount rate for both problems is reduced by half?a $4,526.10/$2,123.21 b $4,464.10/$2,130.19 c $4,464.12/$2,130.19 d $4,526.12/$2,123.21
Calculate the IRR for the following project. An outflow of $$14$,000 in year 0 followed by an inflow of $$6$,000, $$7$,000, and $$7$,000 in one-year increments.a 12.5%b 18.5%c 20%d 21.5%
Calculate the IRR for a project with $$10$,000 of initial cash outflow followed by three years of $$2$,500 cash inflows and a single lump sum inflow in the final year of $$6$,000.a 13%b 12%c 14%d 11%
Assuming $$100$,000 is invested today, for the next three years $$12$,000 is returned annually, and in the fourth year a lump sum of $$80$,000 is provided. What is the IRR of this series of cash flows? Assuming a reinvestment rate of 15%, what is the MIRR of this cash flow?a IRR: 4.52%/MIRR:
Assuming $$25$,000 is invested today, next year $$2$,500 is returned, and in the second year the full $$25$,000 is returned. What is the IRR of this series of cash flows? Assuming that $$2$,500 is invested in a government T-bill with a one-year maturity and a rate of 0.77%, what is the MIRR
a Investment type i Draw a cash flow diagram for an investment with an initial cash outflow of $$30$,000 followed by a three-year period with an inflow of $$5$,000 and a Return OF Capital in year 4.ii Draw a cash flow diagram for a real estate investment without tenants.b Financing type i Draw
a Determine the capitalization rate for a property with a sales price of 600,000 and a Net Operating Income (NOI) of 42,000.b Determine the NOI for a property with a capitalization rate of 7% and a sales price of $$740$,000.c Determine the sales price for a property with a NOI of
a Calculate the NPV for the following project. An outflow of $$110$,000 in year 0 followed by an inflow of $$40$,000, $$45$,000, and $$50$,000 in one-year increments with a discount rate of 8%.b Calculate the NPV for the following project. An outflow of $$8$,000 followed by an inflow for
a Calculate the IRR for the following project. An outflow of $$8$,000 in year 0 followed by an inflow of $$3$,000, $$3$,500, and $$3$,500 in one-year increments.b Calculate the IRR for a project with $$100$,000 of initial cash outflow followed by three years of $$20$,000 and a single
a Assuming $$120$,000 is invested today, for the next three years $$24$,000 is returned annually, and in the fourth year a lump sum of $$70$,000 is provided. What is the IRR of this series of cash flows? Assuming a reinvestment rate of 12%, what is the MIRR of these cash flows?b Assume
a Define risk for a project with a (1) best case scenario providing a 20% return and a 10% probability, (2) a most likely scenario consisting of a 12% IRR and a 70% probability of occurring, and (3) a worst case scenario with a 20% likelihood of returning a −6% IRR.b Define risk for a project
What are holdbacks in construction lending? Why is the practice of holdbacks used?
An institutional investor is comparing management fees for two competing real estate investment funds. Both funds expect to begin operations and are accepting capital commitments. When the funds begin acquiring properties, capital calls will be made for capital contributions during the investment
The ABC Corporation is considering opening an office in a new market area that would allow it to increase its annual sales by $2.5 million. The cost of goods sold is estimated to be 40 percent of sales, and corporate overhead would increase by $300,000, not including the cost of either acquiring or
What are title records? What is an abstract of title?
A closed-end, commingled opportunity fund is being created with an expected three-year life. It expects to acquire properties that it expects to turnaround and sell at the end of three years for a gain. It also plans a minimum target return of 10 percent to investors, which will be based on cash
A fund has an initial investment of $100 million from investors. The investors will receive an 8 percent preferred return. After the preferred return is met, remaining distributions will be split 80 percent to the investors and 20 percent to the fund manager. Funds available for distribution after
Name the four general real estate investment styles and describe each. Identify three specialized styles within these general categories and give examples for each.
What is a deed? How is it different from the title?
What is meant by a title record? Why are these records so important?
What is a future estate? Give an example.
Mr. Investor has a property that he owns but would like to sell. He thinks that it is currently worth $100,000. He also thinks that in order to sell the property that he may need to provide seller financing for five years by either providing the buyer with a purchase money mortgage or a land
What is the sinking-fund factor? How and why is it used?
What types of expenses would property owners pay when operating and maintaining common areas? Give examples for office, retail, and warehouse properties.
This worksheet calculates the incremental return if the Apex property is renovated as illustrated in the chapter. Suppose that the NOI after renovation is $54,000 instead of $56,000. How does this affect the after-tax incremental return of renovations with refinancing?
How does each of the following affect the IRR on the ATCF difference from owning versus leasing?a. The property can be leased for $140,000 instead of $160,000.b. A loan can be obtained at a 3.5 percent interest rate instead of 4 percent.
What are gross ups in determining tenant reimbursements for operating expenses? Why are they used?
What is meant by a target return? How does it relate to an investment benchmark?
When evaluating investment funds, what is meant by performance at the fund level and at the property level? What would generally cause a difference between the two? What is this difference called?
When thinking about the extent of discretion that fund managers have when making property acquisitions, under which fund structures would a manager tend to have the greatest discretion? Under which structures would they tend to have the least discretion? Why?
When reporting property values to investors in funds, which fund types would generally require more frequent appraisals than others? Why?
What are the objectives of performing an attribution analysis? How could fund managers be evaluated by using an attribution analysis?
Why should risk be considered in an attribution analysis?
What is the purpose for a “clawback” in the calculation of a promote?
What procedure is used in your state to handle a pledge of collateral for a mortgage loan?
List five major economic base activities for your city of residence.
Find the historical population figures for your community for the 20th century. Create a chart by ten-year intervals. Determine the most rapid periods of growth, and try to discover what caused them. (One source of the necessary population numbers is the U.S. Census website: “Population of the
Select a site in your city that is in a mixed use or non-residential area, and either is vacant or appears to be ready for change (e.g., structure partially used or vacant, or in need of refurbishing). Go the site during the morning commuting period, on a business day. Situate yourself at or near
Select a property of interest to you, or to an industry contact, for which market research would be interesting. Examine the property, collect what information is available about it, and then write a market defining story for the property using the questions from the chapter as a guide.
For your own state, determine whether: a. It is a judicial or non-judicial foreclosure state.b. The standard home loan is based on a deed of trust or a mortgage.c. There is a statutory right of redemption, and, if so, how long.d. Deficiency judgments are allowed against defaulted
Solve for the unknown discount rate in each of the following: Present Value Years Discount Rate Future Value $2,970 $2,400 11.24% 11.61 10.95 10,800 1,853,820 5,316,180 3,600 10 390,000 382,610 15 30 9.17

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Real Estate Principles A Value Approach 5th edition David C Ling, Wayne Archer - Solutions

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