question 12

Question 1 5 pts USPAP regulations state an appraiser must estimate the value of an income producing property based on approaches to value. Time Run Attent du 1 Hour, 22 ations One 55 Two Suides Three No specific number of approaches are required ate Ultra Question 2 5 pts Investment Value using income capitalization (equity residual model) estimates value to the market place using market based criteria to typical investors using typical investment criteria found in the marketplace O to a specific inwestor using that specie investor's criterin only estimates the value of the equity since the mortgage is not taken into account Question 3 5 pts Which approach to value generally estimates the highest value and is least likely to be relied on by the appraiser when estimating value of an older income producing property? Cost approach Income approach Market data approach None of the above Rules require the appraiser to use all three approaches and average them to arrive ata final valuation estimate Question 4 5 pts Mechanically speaking, the main difference between market value and investment value is: Market value capitales before tax cash flow and investment value capitalizes net operating income (NON Market value capitais the net operating income and adds back the loan balance, where investment value capitalizes the before tax cash flow and adds back the loan balance There is no difference. Both variation models are identical Notes capitalized by the market caprate for market value, and before tax cash flow (BTCFcapitalized by the investor's desired rate of return for Investment value. The mortgage balance is not relevant Net operating income (NOT is capitalized to the market caprate to arrive at market value. Before tax cash Tow (BTCF) is capitalized by the inwestor's desired rate of return to arrive at the value of the equity position then the loan balance is added back to arrive at total investment value Question 5 5 pts Scenario Document Referring to the attached valuation scenario #1 What is the indicated MEAN cap rate? 10.67% 10.78% 11.87% 1.07 Question 6 5 pts Scenario Document Referring to the attached valuation scenario #1 What is the value of the subject property using the income capitalization approach to value and the mean cap rate? $7244.000 $6,987322 $6.751,165 $6,719.852 Question 7 5 pts Referring to the attached valuation scenario #1 Scenarlo Document What is the weighted mean cap rate? 10.73% 11.01% 10.78% 1120% Question 8 5 pts Referring to the attached valuation scenario #1 Scenario Docuncat What is the value of the property using the weighted mean cap rate? $6.751.165 56,719 852 $6.585.455 The value can not be determined using this method Question 9 5 pts Referring to the attached valuation scenario #1 Scenario Document What is the value if you were to use the median cap rate? 56.586455 $6,719.852 $5,999.99 56,627.603 Question 10 5 pts Referring to the attached valuation scenario 1 Scenario Document What is the value if you were to use the mode cap rate? $6,467857 $6.439.756 56.751.165 Question 11 5 pts Referring to the attached valuation scenario #1 Scenario Document What is the cap tate using mortgage equity analysis? 11.20% 11.11% 1214% There is no such thing as morte equity analysis Question 12 5 pts Referring to the attached valuation scenario #1 Scenario Document What is the value using mortgage equity analysis? 0.86.566.678 $6,467,857 $5.990.700 $6.366,452 VALUATION Scenario #1 Consider the following sales of warehouse properties in the Norfolk, VA market during 2007: B NOI 5864,523 5421,312 5978,743 $97,777 $269,888 $30,852 SALES PRICE $7,859,300 $3,830,109 $9,012 367 5956,722 $2,582,660 $275,699 WEIGHT 10% 10% 40% 10% 25% 5% 0 E F The warehouse property being appraised has a Not of $724,400 In 2010 typical investor returns in the warehouse market are 14% In 2010, the typical foran rates for warehouses in this market are 84% 20 years with a typical market loan to value ratio of 75% There were no significant sales of warehouse properties in Norfolk in 2008 or 2009 The investor considering purchase of this property will place a 65% loan against the property at 7.9% 20 Year amortization. The agreed upon valuation method for determining the sales price was the WEIGHTED MEAN cop rate