Financial Bootcamp. Participant Guide SAMPLE


 Kerry Atkinson
 5 years ago
 Views:
Transcription
1 Financial Bootcamp Participant Guide September 2017
2 2017 National Apartment Association 2
3 Table of Contents Section 1: Welcome... 6 Participant Introductions... 6 Learning Goals and Objectives... 6 Section 2: Number Types... 8 Rounding... 8 Fractions... 8 Parts of a Fraction... 8 Fractions Additions (When the Denominator is the same)... 9 Fractions Additions (When the Denominator is different)... 9 Simplify or Reduce a Fraction Fractions Subtraction Fractions Multiplication Fractions  Division When the Numerator is Larger than the Denominator Decimals Changing Decimals to Percentages Changing Fractions to Decimals Percentages Section 3: Basic Algebra Solving for the Unknown (Addition and Subtracting) Solving for the Unknown (Multiplication and Division) Section 4: Comparing and Predicting Averages Average vs. Median Annualization versus Extrapolation Annualization Extrapolation Section 5: Practical Property Management Calculations Closing Ratio Resident Turnover Rate National Apartment Association 3
4 Physical Occupancy Economic Occupancy Variance Percentage Percentage Change Rent Increase Percentage Using Percentages to Change a Number (Where number increases) Using Percentages to Change a Number (Rent Increase example where the percentage is known) Using Percentages to Change a Number (Where number decreases) Using Percentages to Change a Number (Where number decreases another example) BreakEven Occupancy Ratio Operating Expense Ratio Loan to Value Ratio Return on Investment (ROI) Cap Rate Section 6: Area, Space, and Volume Calculating Perimeter Calculating Area Calculating Volume Section 7: Practice Rent Per Square Foot Cost Per Unit ProRations Payback Period Variances Operating Expense per Square Foot Action Plan Action Plan National Apartment Association 4
5 SECTION 1 Welcome, Introductions, and Learning Goals 2017 National Apartment Association 5
6 Section 1: Welcome Welcome to Financial Bootcamp. This halfday workshop has been designed by NAAEI to provide you with an opportunity to refresh and sharpen your math skills in preparation for taking the CAM or CAPS Credential Program. Participant Introductions A valuable component of a learning experience like this Bootcamp is to meet and learn from other participants. We encourage you to interact with the other participants in attendance before, during, and after this event. Learning Goals and Objectives This workshop will help you achieve six key learning objectives. These goals are to: 1. Refresh your knowledge of fundamental math functions: fractions, decimals, rounding, and percentages 2. Solve for the unknown using basic algebra 3. Understand averages versus weighted averages 4. Learn the difference between annualization and extrapolation 5. Understand how to calculate area 6. Work with common property management calculations that you will use in the CAM and CAPS programs 2017 National Apartment Association 6
7 SECTION 2 Number Types 2017 National Apartment Association 7
8 Section 2: Number Types Rounding In the CAM and CAPS credential courses, you may be instructed to round to the nearest tenth when working with percentages, and to whole numbers when working with dollar amounts. The fundamental rounding technique tells us if the number you are rounding is followed by 5, 6, 7, 8, or 9, round the number up. If it s followed by 4, 3, 2, or 1, round the number down. Fractions Fractions are a big part of our daily lives, even if we don t realize it. Perhaps it s when you split the check at lunch with your friends. Or when you want to make half of that stir fry dish for dinner and you only need ½ of 1/3 cup of olive oil. In property management, sometimes we must allocate expenses across multiple properties or figure our breakeven occupancy, so we need to understand fractions. Parts of a Fraction TOP = NUMERATOR BOTTOM = DENOMINATOR The denominator tells the total number of parts in the fraction. This number shows how many equal 'pieces' something has been divided into National Apartment Association 8
9 Fractions Additions (When the Denominator is the same) When adding fractions with the same denominator, the denominator stays constant. The addition takes place with the numerator only. Fractions Additions (When the Denominator is different) When adding fractions with different denominators, there are a few steps required. In order to add the fractions, we have to convert the denominator to a common denominator. Step 1: Multiply both numbers on the first fraction by the bottom number of the second fraction. Step 2: Multiply both numbers on the second fraction by the bottom number of the first fraction. Step 3: Add the numerators of the two fractions together. Step 4: Simplify (or reduce if needed) National Apartment Association 9
10 Simplify or Reduce a Fraction To reduce a fraction to its simplest form, divide both the numerator and denominator by the Greatest Common Divisor (GCD). The GCD may be obvious, or it may take several steps to get to the simplest version of the fraction. Fractions Subtraction When subtracting fractions that have a common denominator, all that is required is to subtract the numerator. If the denominators are different, we ll use the same steps we used when adding fractions with different denominators. Step 1: Multiply both numbers on the first fraction by the bottom number of the second fraction. Step 2: Multiply both numbers on the second fraction by the bottom number of the first fraction. Step 3: Add the numerators of the two fractions together. Step 4: Simplify (or reduce if needed) National Apartment Association 10
11 Fractions Multiplication Multiplying fractions is straightforward. You multiply the numerator and the denominator and simplify if needed. 1/4. Fractions  Division Dividing fractions is a bit more complex. There are three things to remember when dividing fractions. 1. Leave the first fraction as is 2. Change the divide function to multiply 3. Turn the second fraction over or invert the one you are dividing by. When the Numerator is Larger than the Denominator Sometimes a fraction calculation will result in the numerator being larger than the denominator. In that case, the denominator is divided into the numerator to simplify the fraction, resulting in a whole number/decimal combination. To convert the decimal back into a fraction, leave the whole number as it is. Convert 0.25 to a fraction: 0.25=25/100. Then reduce the fraction to the lowest term, which is 2017 National Apartment Association 11
12 If the decimal goes to the 10 th spot, you d multiply by 10; if it goes to the 1000 th spot, you d multiply by Decimals Decimals are important because we use them every day in different situations, such as counting money, looking at price tags, calculating miles per gallon, or figuring price per square foot. Changing Decimals to Percentages To convert a decimal to a percent, multiply the decimal by 100, then add the % symbol. A simple way to multiply a decimal by 100 is to move the decimal point two places to the right National Apartment Association 12
13 Changing Fractions to Decimals This diagram shows the relationships between percentages, decimals, and fractions. To change a fraction to a decimal so we can get to a percentage, divide the top of the fraction (the numerator) by the bottom (the denominator), multiply by 100 and add a "%" sign. If the fraction is 1/10, divide 10 into 1 resulting in 0.1. Then, using the process we looked at earlier, move the decimal point two places to the right and add the % sign resulting in 10% National Apartment Association 13
14 Percentages Many of the Key Performance Indicators (KPI) and benchmark figures your company may use to evaluate performance or achievement are in the form of percentages. Think about closing ratios or work order completions. Decimal.30 Fraction 3 10 Percentage 30% This diagram shows the relationship between fractions, decimals, and percentages and demonstrates how one number can be expressed in multiple forms. 3/10 becomes a decimal by dividing the denominator into the numerator. It becomes a % by moving the decimal point National Apartment Association 14
15 SECTION 3 Basic Algebra 2017 National Apartment Association 15
16 Section 3: Basic Algebra Algebra is a form of mathematics that uses letters or symbols for unknown numbers so that we can solve for those unknowns. Solving for the Unknown (Addition and Subtracting) We may know that A = B + C, but what if we only have A and C? To find B, subtract the last figure from both sides. Solving for the Unknown (Multiplication and Division) The same principle applies to multiplying and dividing. If: A = B x C Then B = A/C And C = A/B 2017 National Apartment Association 16
17 2017 National Apartment Association 17
18 SECTION 4 Comparing and Predicting 2017 National Apartment Association 18
19 Section 4: Comparing and Predicting Averages Many of the Key Performance Indicators used in Property Management are averages. Using an average, or a weighted average, aids in analytical comparison of data from multiple sources. To determine the average of a group of numbers, add all the numbers and divide by the number of figures in the list. Unit Type Square Footage Rent Studio 450 $575 1 BR / 1 BA 680 $720 2 BR / 2 BA 1,075 $925 3 BR / 2.5 BA 1,425 $1,250 4 BR / 3 BA 1,650 $1,800 AVERAGE SQUARE FEET 1,056 AVERAGE RENT $1, National Apartment Association 19
20 Average vs. Weighted Average A weighted average is the average of values which are scaled by importance. The weighted average of values is the sum of weights times values divided by the sum of the weights. To determine the weighted average, calculate the TOTAL square footage and rent first. In this example, we would multiply the # of units x the SF and Rent for each unit type to get the total square footage and total rent. The totals are divided by the total # of units. Unit Type Total Units Square Footage Rent Studio $575 1 BR / 1 BA $720 2 BR / 2 BA 75 1,075 $925 3 BR / 2.5 BA 44 1,425 $1,250 4 BR / 3 BA 36 1,650 $1,800 TOTAL ,925 $258,975 WEIGHTED AVERAGE 1,019 $ National Apartment Association 20
21 Average vs. Median As we saw earlier, to determine an average, the total of all the numbers is divided by the # of items or numbers in the list. The "median" is the "middle" value in a list of numbers. To find the median, your numbers have to be listed in numerical order from smallest to largest, and then find the middle one. In this example, there are 9 numbers so the middle # (the one in the 5 th spot) is the middle or median If there were an even number of items on the list, the median would be the midpoint between the figures in the middle 2 spots National Apartment Association 21
22 Unit Type Total Units Square Footage Rent Studio $604 1 BR / 1 BA $780 2 BR / 2 BA 60 1,100 $1,015 3 BR / 2.5 BA 36 1,470 $1,350 4 BR / 3 BA 12 1,809 $2,100 TOTAL ,428 $211,596 AVERAGE WEIGHTED AVERAGE Annualization versus Extrapolation While we typically think of annualization and extrapolation as being part of the budget process but we can also use them to reforecast financial performance throughout the year. Sometimes these two concepts are used interchangeably but they are different National Apartment Association 22
23 Annualization To annualize a dollar amount, the amounts that are known are added together, and divided by the # of months they represent. This gives us an average monthly amount that is then multiplied by 12 months to give us an annual amount. MONTH AMOUNT January $1,200 February $1,500 March $1,300 April $1,800 May $2,200 June $1,700 July $2,300 August $2,150 TOTAL $14,150 Average $14,150 8 = $1, Annualized $1, x 12 = $21, National Apartment Association 23
24 Extrapolation Extrapolation takes a list of known numbers and extends the list based on what can be predicted from the list of known numbers. In this example, we can see that the monthly amount has increased by $300 each month so we can predict that trend will continue in the coming months. MONTH AMOUNT January $1,200 February $1,500 March $1,800 April $2,100 May $2,400 June July August September Before extrapolating known data, check that the numbers aren t skewed for some reason, and that you ve considered seasonal changes or anomalies. Calculate the total for each line item National Apartment Association 24
25 Advertising, Office Supplies, and Landscape Maintenance are extrapolated by using the number trend shown in the diagram. Clubhouse/Amenity Expense and Appliance Repair are annualized. Clubhouse/Amenity Expense: Appliance Repair Expense: 2017 National Apartment Association 25
26 SECTION 5 Property Management Calculations 2017 National Apartment Association 26
27 Section 5: Practical Property Management Calculations There is a long list of important areas of calculations in property management. Many are important Key Performance Indicators, and some are important measurements for lenders and owners. Practical Property Management Calculations Closing Ratio Turnover Rate Physical Occupancy Economic Occupancy Variance Percentage Rent Increase Percentage Percent Change Closing Ratio Calculating Area Breakeven Occupancy Operating Expense Ratio LoantoValue Rate of Return Cap Rate A closing ratio measures the number of leases or closed sales being secured from the number of prospects. It s a KPI used to determine sales effectiveness of the leasing team. Many companies set a closing ratio goal for the leasing team, usually 3540%, but it varies. To calculate closing ratio, the number of leases is divided by the number of traffic National Apartment Association 27
28 What happens if a lease (application) is not approved? When we adjust the number of closed sales, and recalculate, what is the NET closing ratio? Resident Turnover Rate Resident Turnover Rate tells us the ratio of moveouts compared to the total number of units. This rate is most often stated as an annual figure. Organizations often set a resident turnover goal for each property or submarket, usually 5060%, but those goals vary depending on property type and market conditions. In the student housing market, the turnover rate can be as high as 100% or even higher in some cases. To determine resident turnover rate, the number of moveouts is divided by the total number of units National Apartment Association 28
29 Physical Occupancy Physical Occupancy is calculated by dividing the number of occupied units by the total number of units. Economic Occupancy Economic Occupancy represents occupancy after vacancy, bad debt, concessions, and nonrevenue units have been factored out. The formula is Total Rent Revenue Gross Potential Rent. GPR = all occupied units at current leased rate + vacant units at market rate TRR = GPR (vacancy, bad debt, concessions, and nonrevenue units) 2017 National Apartment Association 29
30 Variance Percentage When there is a variance between actual expenses or income and budgeted expenses or income, the variance is often expressed as a percentage to aid in comparison and analysis. To calculate a variance percentage, the actual amount is subtracted from the budgeted amount to get the dollar variance. The difference is then divided by the budgeted amount National Apartment Association 30
31 Percentage Change We are often asked to express changes over time as a percentage. This is done by dividing the change amount by the older or earlier amount. Looking at the amount of the water bill each month for the last 4 months, we see that from April to May, there was an increase of $250. If we divide the increase amount by the earlier amount of $5,000, we see that the percentage change in May is 5.0%. What is the percentage change for June and July? Rent Increase Percentage We can use that same percentage change process to determine rent increase percentages. The increase amount is divided by the old rate National Apartment Association 31
32 Using Percentages to Change a Number (Where number increases) In the percentage change process we just reviewed, the numbers were known so we used those numbers to calculate the percentage. Sometimes we know the percentage but need to find a number. For example, we know that Bob Brown earns $35,000 per year as a maintenance tech. If we give him a 3% pay increase, what is his new salary? Alternate Solution Using Percentages to Change a Number (Rent Increase example where the percentage is known) We looked at rent increase percentage earlier when we knew the old and new rate, but if we need to calculate the new rate based on a known percentage, we can do that by multiplying the percentage by the known rate National Apartment Association 32
33 Using Percentages to Change a Number (Where number decreases) If the percentage indicates a reduction, we still use the known number multiplied by the percentage to get the change number. Then we subtract that number from the original known number. Alternate Solution: Like the alternate solution we reviewed, we can subtract the known percentage from whole number 1, and use that percentage to multiply the known dollar amount National Apartment Association 33
34 Using Percentages to Change a Number (Where number decreases another example) BreakEven Occupancy Ratio BreakEven Occupancy Ratio is an important measurement as it tells us the lowest occupancy percentage a property can maintain and still be able to pay all the necessary bills. When a property s occupancy falls below the breakeven occupancy level, the owner may have to supplement the property financially, which is never a desirable scenario. Breakeven occupancy is calculated by adding the expense components the property is responsible for paying  operating expenses, debt service, and replacement reserve (if applicable) and dividing it by Effective Gross Income (total revenue including other income for the property). Note: You ll learn more about GPR and EGI in CAM. (OE + DS + RR) EGI (Operating Expenses + Debt Service + Replacement Reserve) Effective Gross Income 2017 National Apartment Association 34
35 Calculate the BreakEven Occupancy Ratio using the following information: Operating Expenses are $525,667 Debt Service is $306,00 Replacement Reserve is $125,000 Effective Gross Income is $1,101,660 Operating Expense Ratio Operating expense ratio is an important Key Performance Indicator in property management as it shows the correlation between our operating expenses and our total property revenue. It is calculated by dividing Effective Gross Income into the annual Operating Expenses. OE/EGI = Operating Expense Ratio Using the following information, calculate the OE Ratio Operating Expenses (OE) = $1,411,870 Gross Potential Rent (GPR) = $2,957, National Apartment Association 35
36 Loan to Value Ratio Another important measurement, Loan to Value Ratio (LTV) is expressed as a percentage, and the lower the LTV, the lower the risk to the lender. It is calculated by dividing the property value into the loan amount. If the loan amount is $35,000,000 and the property value is $48,000,000, what is the loan value? Return on Investment (ROI) Return on Investment measures the rate of return based on a property s income stream. It s used to identify the efficiency of an investment. It is calculated by dividing NOI by the property value. If Heavenly Haven s NOI is $890,000 and the value of the property is $9,000,000, what is the ROI? 2017 National Apartment Association 36
37 Cap Rate Cap Rate is a rate of return used to measure a property s value based on its NOI. The lower cap rate = higher value; the higher cap rate = lower value. It s used to reflect the investor s desired ROI. The Cap Rate is calculated by dividing NOI by the purchase price. Once you have the Cap Rate, you can find the value by dividing the Cap Rate into NOI. If NOI is $605,875 and the purchase price is $9,000,000, what is the Cap Rate? What is the value of the property? This example show that the property is valued at a higher rate than the price the owner paid for it National Apartment Association 37
38 SECTION 6 Area, Space and Volume 2017 National Apartment Association 38
39 Section 6: Area, Space, and Volume Knowing how to calculate area, space and volume can allow us to calculate the volume of a swimming pool, the area of a room to be painted, or the size of an apartment unit. Calculating Perimeter The perimeter is the sum of all sides of the area. This may be useful in determining in how many feet of holiday lights you would need to go around the building or how many feet of molding you ll need to add a chair rail. Calculating Area Area is the measurement of how much space there is inside a room or space. Area is determined by multiplying width times height. Calculating the area of a space can be useful for determining how much paint to buy to cover a wall or how much grass seed you need for an area of the lawn National Apartment Association 39
40 Calculating Volume In property management, the most common need for calculating volume is for determining how many gallons of water a swimming pool holds. Volume is calculated by multiplying width x height x depth. The result gives us cubic feet. In this example, the swimming pool is cubic feet. If there is cubic feet in a gallon, how many gallons will this pool hold? 2017 National Apartment Association 40
41 SECTION 7 Practice 2017 National Apartment Association 41
42 Section 7: Practice Property management software does a lot of the calculation for us in today s world. Software isn t flawless and there are hundreds of behindthescenes settings that may impact the results we see on reports and dashboards. That makes it important for us to be able to manually calculate when needed or to verify the accuracy of what our property management software system tells us. Rent Per Square Foot Rent per square foot can help us more appropriately compare our rental rates with our competition. It expresses the rent rate in a way we can compare applestoapples. What is the Weighted Rent Average? 2017 National Apartment Association 42
43 What is the AVERAGE Rent Per Square Foot? What is the WEIGHTED AVERAGE Rent Per Square Foot? Cost Per Unit Expenses are often expressed in a costperunit manner. This allows us to be able to compare the results of multiple properties in a meaningful manner. Cost per unit is determined by dividing the number of units into the expense National Apartment Association 43
44 ProRations Aside from dealing with prorated rent at movein and moveout, we sometimes have to allocate a portion of a salary or expense to multiple properties. To determine the portion of Mary s salary that each property should pay, divide each property s total units by the total # of units to get an allocation percentage. Then multiply that % by the total salary. To determine how much each property pays for the joint ad, divide $15,000 by 600 to get the cost per unit ($25) and then multiply the cost per unit by the # of units for each property. Property Total Units Ashley Acres /600 = 33.3% Brice Bend /600 = 21.7% Chapel Chase /600 = 26.7% Derby Downs /600 = 18.3% ProRation Salary Advertising TOTAL % $40,000 $15,000 Payback Period When recommending upgrades or improvements to your property, one of the critical calculations that will help you get approval is the payback period. The number of units multiplied by the cost of the washers/dryers gives us the total cost of the upgrade. In the example provided, what is the total cost? 2017 National Apartment Association 44
45 If we know we will be able to charge an extra $50 for the 50 units we upgrade, the monthly additional income would how much? At $2,500 per month, it will take how many months to recoup the total cost of the washers/dryers? Of course, that assumes that each of these units will be occupied every month. The payback period may be slightly longer if these units are vacant for periods of time during the 13.6 months. Variances Application Fees are budgeted to be $165,000 for the year. Actual Application Fees for the year is $153,357. What is the variance % compared to budget? 2017 National Apartment Association 45
46 Operating Expense per Square Foot Biscayne Bay is a 320unit apartment community with 353,000 total square feet. For the period ending August 31, the Operating Expenses total $1,237,643. What is annual operating expense per square foot? 2017 National Apartment Association 46
47 Action Plan 2017 National Apartment Association 47
48 Action Plan Complete the Action Plan included in this Participant Guide. The purpose of this Action Plan is to identify ways to apply what you learned in this workshop to your daytoday work. This is your Action Plan; there is no right or wrong action item to include National Apartment Association 48
49 Action Plan I plan to use what I learned in this workshop in the following ways: I will use the following formulas or calculations: Calculation or Formula Purpose Result Ex: Calculate the # of gallons our hot tub holds To be able to more accurately budget for the cost of draining/refilling hot tub 302 gallons 2017 National Apartment Association 49
Financial Bootcamp SAMPLE. Participant Guide
Financial Bootcamp Participant Guide March 2018 LIMITS OF LIABILITY AND DISCLAIMER OF WARRANTY 2017 by the National Apartment Association, 4300 Wilson Boulevard Suite 400 Arlington, VA 22203. All rights
More informationFinancial Bootcamp. Facilitator Guide Instructions for Half Day Workshop Delivery
Financial Bootcamp Facilitator Guide Instructions for Half Day Workshop Delivery September 2017 2017 National Apartment Association 2 Workshop Information Workshop Length: This workshop is designed to
More informationFinancial Bootcamp. Facilitator Guide Instructions for Half Day Workshop Delivery
Financial Bootcamp Facilitator Guide Instructions for Half Day Workshop Delivery March 2018 LIMITS OF LIABILITY AND DISCLAIMER OF WARRANTY 2017 by the National Apartment Association, 4300 Wilson Boulevard
More informationREAL ESTATE. Practice in Illinois. Modern EIGHTH EDITION
Modern REAL ESTATE Practice in Illinois EIGHTH EDITION Fillmore W. Galaty, Wellington J. Allaway, and Robert C. Kyle, with Karen Stefano, Consulting Editor, and Chris Read, Contributing Editor 24 C H A
More informationFour (4) Factors in Investment Definition: Investment
Introductions Your name Where you work Your job responsibilities How long you have been in the industry What you hope to get from this class Chapter 1: Investments Agenda 2 Investments Adding Value to
More information$450,000 $63,425 $39, % PURCHASE PRICE NET OPERATING INCOME ANNUAL CASH FLOW CAP RATE
Executive Summary Key Property Metrics $450,000 $63,425 $39,143 14.1% PURCHASE PRICE NET OPERATING INCOME ANNUAL CASH FLOW CAP RATE $70,000 $60,000 $50,000 $40,000 $30,000 Annual Cash Flow Repairs, 8%
More information$450,000 $63,425 $33, % PURCHASE PRICE NET OPERATING INCOME ANNUAL CASH FLOW CAP RATE
Executive Summary Key Property Metrics $450,000 $63,425 $33,431 14.1% PURCHASE PRICE NET OPERATING INCOME ANNUAL CASH FLOW CAP RATE $60,000 $50,000 $40,000 $30,000 Annual Cash Flow Maintenance & Repairs,
More informationI R V. where I = Annual Net Income, R= Capitalization Rate and V= Value
Income Approach to Valuation Capitalization (Cap Rates) the short version! Capitalization is the process of converting net income into a meaningful value that correlates net income to the value of the
More informationESTIMATING NET OPERATING INCOME (I O )
ESTIMATING NET OPERATING INCOME (I O ) S P E C I A L S K I L L S ESTIMATING NET OPERATING INCOME (IO) (STAGE 5) Gross Income (GI) Rental Income Parking Income Other Income Total Possible Income  Vacancy
More information2. The, and Act, also known as FIRREA, requires that states set standards for all appraisers.
CHAPTER 4 SHORTANSWER QUESTIONS 1. An appraisal is an or of value. 2. The, and Act, also known as FIRREA, requires that states set standards for all appraisers. 3. Value in real estate is the "present
More informationPREPARING FOR THE MINNESOTA INCOME PROPERTY CASE STUDY EXAM WORKSHOP
PREPARING FOR THE MINNESOTA INCOME PROPERTY CASE STUDY EXAM WORKSHOP Date: September 18, 2018 Location: Country Inn & Suites Chanhassen, MN Instructor: Bob Wilson, CAE, ASA Revised October, 2017 PREPARING
More informationName: Date: Problem Set: Find the value of these expressions for the specified replacements of a, b, and c.
Rational Epressions KEY Module: Objective: Evaluating Rational Epressions To practice evaluating a rational epression for a given set of values Name: Date: Fill in the blanks. Use one of the words in parentheses
More information2016 Level I Tutorials. Income Approach to Value
2016 Level I Tutorials Income Approach to Value 1 The income approach is based on the principal that the value of an investment property reflects the quality and quantity of the income it is expected to
More informationconcepts and techniques
concepts and techniques S a m p l e Timed Outline Topic Area DAY 1 Reference(s) Learning Objective The student will learn Teaching Method Time Segment (Minutes) Chapter 1: Introduction to Sales Comparison
More informationThe result of your calculations is the Net Operating Income, or monthly cash flow BEFORE any mortgage payments.
CHEAT SHEET #6 NET OPERATING INCOME (IS YOUR RENTAL REALLY MAKING MONEY?) The Net Operating Income calculation is fairly straightforward. al income minus the expenses to own and operate the property equals
More informationSales Associate Course
Sales Associate Course Chapter Sixteen Appraisal 1 2 Appraiser Specific amount Impartial (non biased) Defendable Estimate (Opinion) of value Fee based on time and difficulty Must follow Uniform Standards
More informationTrulia s Rent vs. Buy Report: Full Methodology
Trulia s Rent vs. Buy Report: Full Methodology This document explains Trulia s Rent versus Buy methodology, which involves 5 steps: 1. Use estimates of median rents and forsale prices based on an area
More informationINTRODUCTION TO FEDERAL LOW INCOME HOUSING TAX CREDITS. 1. Applicable Percentage
INTRODUCTION TO FEDERAL LOW INCOME HOUSING TAX CREDITS I. THE TAX CREDIT GENERALLY a. Established under the Tax Reform Act of 1986. Essentially an effort to partially privatize the affordable housing industry.
More informationChapter 18. Investors have different required yields Different risk assessment Different opportunity cost of equity
Decision Making in Real Estate Centers Around Valuation Chapter 18 Investment Decisions: Ratios We examined the concept of market value in Chapters 7 & 8 As noted, professional RE appraisers are often
More informationChapter 8. How much would you pay today for... The Income Approach to Appraisal
How much would you pay today for... Chapter 8 One hundred dollars paid with certainty each year for five years, starting one year from now. Why would you pay less than $500 Valuation Using the Income Approach
More informationChapter 8. How much would you pay today for... The Income Approach to Appraisal
How much would you pay today for... Chapter 8 One hundred dollars paid with certainty each year for five years, starting one year from now. Why would you pay less than $500 Valuation Using the Income Approach
More informationRisk Management Insights
Risk Management Insights Appraisal Review Part II: Income Capitalization Approach George Mann, Managing Director and Chief Appraiser, Collateral Evaluation Services, Inc.and Nikki Griffith, MAI, CCIM,
More informationAppraisal Review: Analyzing the 1004
Appraisal Review: Analyzing the 1004 1 LIVE ONLINE PARTICIPANT GUIDE Version: 8.12 Table of Contents The Purpose of the Appraisal... 3 Define Market Value... 3 Scenario 1 (John Johnson report)  1004 Uniform
More informationNorth Seattle College RES 217 Session 5. Market Feasibility and Financial Analysis
North Seattle College RES 217 Session 5 Market Feasibility and Financial Analysis Preliminary Analysis Completed BackoftheEnvelope Analysis (aka, BackoftheNapkin) Main advantage to backofthe envelope
More informationBUSI 330 Suggested Answers to Review and Discussion Questions: Lesson 10
BUSI 330 Suggested Answers to Review and Discussion Questions: Lesson 10 1. The client should give you a copy of their income and expense statements for the last 3 years showing their rental income by
More informationTHE APPRAISAL OF REAL ESTATE 3 RD CANADIAN EDITION BUSI 330
THE APPRAISAL OF REAL ESTATE 3 RD CANADIAN EDITION BUSI 330 REVIEW NOTES by CHUCK DUNN CHAPTER 20 Copyright 2010 by the Real Estate Division and Chuck Dunn. All rights reserved CHAPTER 20  THE INCOME
More informationBuilding value on a rental property It s all about the NOI.
Building value on a rental property It s all about the NOI. Dino Nicosia, Broker of Record, Investpro Realty Ltd., Brokerage The real estate market is divided into many submarkets, such as commercial,
More informationSales Course. Math Review. Gold Coast School of Real Estate. Chapter 10
Sales Course Chapter 10 Math Review Gold Coast School of Real Estate 1 P 172174 How many acres are in a tract identified as the N½, of the SE ¼, of the SW ¼, of the N½? 640 2 4 4 2 = 10 acres Copyright
More informationBroker. Investment Real Estate. Chapter 15. Copyright Gold Coast Schools 1
Broker Chapter 15 Investment Real Estate Copyright Gold Coast Schools 1 Learning Objectives Matching an investor with the right property Evaluating the sites and improvements of income properties Determining
More informationUNIT FIVE RATIONAL EXPRESSIONS 18 HOURS MATH 521B
UNIT FIVE RATIONAL EXPRESSIONS 8 HOURS MATH 5B Revised Nov4, 00 07 SCO: By the end of grade students will be epected to: B model (with concrete materials and pictorial representations) and epress the relationship
More informationy y x x infinite cloner
Learning Target: Practice simplifying algebraic epressions using algebra tiles and an Epression Comparison Mat to determine which of two epressions is greater. Learn how to record their work in order to
More informationThe 5 biggest houseflipping mistakes that will cost you serious time and money and how to avoid them
Doug Hopkins Free Special Report The 5 biggest houseflipping mistakes that will cost you serious time and money and how to avoid them Hi! Doug Hopkins here from the Property Wars TV show on The Discovery
More informationMatapos ang Pagbubungkag ng Damikay tayo ay tutungo sa Rational Expressions MATH DIVISION, IMSP, UPLB
Matapos ang Pagbubungkag ng Damikay tayo ay tutungo sa Rational Epressions 1 RATIONAL EXPRESSIONS Upon completion, you should be able to Simplify rational epressions Perform addition, subtraction, multiplication,
More informationHC FINAL COST CERTIFICATION FORM AND INSTRUCTIONS
HC FINAL COST CERTIFICATION FORM AND INSTRUCTIONS The Final Cost Certification Application (FCCA) must be completed by the Applicant and returned to Florida Housing along with an unqualified audit report
More informationUnlike normal companies, real estate investment trusts (REITs) are collections of individual properties.
Linking Individual Properties to REITs Unlike normal companies, real estate investment trusts (REITs) are collections of individual properties. Sure, they have management teams and overhead and other business
More informationCalifornia Real Estate License Exam Prep: Unlocking the DRE Salesperson and Broker Exam 4th Edition
California Real Estate License Exam Prep: Unlocking the DRE Salesperson and Broker Exam 4th Edition ANSWER SHEET INSTRUCTIONS: The exam consists of multiple choice questions. Multiple choice questions
More informationLesson 1: Real Estate Math
Lesson 1: Real Estate Math The Language of Math Topics This section focuses on the following topics: Key Terms Overview Fractions Decimals Percentages Learning Objectives At the conclusion of this section
More information1. 6 RATIOnAl expressions
58 CHAPTER 1 Prerequisites learning ObjeCTIveS In this section, ou will: Simplif rational epressions. Multipl rational epressions. Divide rational epressions. Add and subtract rational epressions. Simplif
More informationBridge Financing & Valuation Trends Amid a Changing CRE Landscape ARBOR.COM 800.ARBOR.10
Bridge Financing & Valuation Trends Amid a Changing CRE Landscape ARBOR.COM 800.ARBOR.10 Today s Speakers Gianni Ottaviano Senior Vice President, Structured Finance Production, Arbor Realty Trust, Inc.
More informationSimplify each expression using addition, subtraction, multiplication, or division.
A rational epression is of the form polynomial ; a fraction of polynomial epressions. polynomial To simplify a rational epression means 1. The answer is in lowest terms ; the numerator and denominator
More informationInitial sales ratio to determine the current overall level of value. Number of sales vacant and improved, by neighborhood.
Introduction The International Association of Assessing Officers (IAAO) defines the market approach: In its broadest use, it might denote any valuation procedure intended to produce an estimate of market
More informationASSESSMENT METHODOLOGY
2018 ASSESSMENT METHODOLOGY MULTIRESIDENTIAL MANUFACTURED HOME PARK A summary of the methods used by the City of Edmonton in determining the value of multiresidential manufactured home park land properties
More informationTypical Valuation Approaches and How to Deal With Them
Typical Valuation Approaches and How to Deal With Them January, 2018 Anthony F. DellaPelle, Esq., CRE Shareholder, McKirdy, Riskin, Olson & DellaPelle, P.C. Morristown, New Jersey Christian F. Torgrimson,
More informationProject Economics: The Value of Leasing. Russell Banham, Savills
ICSC European Retail Property School Project Economics: The Value of Leasing Russell Banham, Savills (Investment, Development & Asset Management) Introduction Who I am Russell Banham Over 30 years of experience
More informationINSIDER S GUIDE. The 5 Most Powerful Ways to Improve Tenant Satisfaction Today
INSIDER S GUIDE The 5 Most Powerful Ways to Improve Tenant Satisfaction Today Tenant satisfaction significantly impacts your bottom line. Overview: The Real Cost of Tenant Dissatisfaction You try hard
More informationMULTIFAMILY PROPERTY MANAGERS
Suite TM MULTIFAMILY PROPERTY MANAGERS Move Your Business Forward REALTIME INFORMATION TO OPTIMIZE YOUR RENTS AND OCCUPANCIES 3,000 multifamily owners and property management firms use CoStar because
More informationBenchmarking Your CCRC
Benchmarking Your CCRC Presented by: Moore Stephens Lovelace, P.A. Objectives Provide information on how ratios can provide insight into financial statements Give information about key ratios and what
More informationChapter 12 Changes Since This is just a brief and cursory comparison. More analysis will be done at a later date.
Chapter 12 Changes Since 1986 This approach to Fiscal Analysis was first done in 1986 for the City of Anoka. It was the first of its kind and was recognized by the National Science Foundation (NSF). Geographic
More informationDeal Analyzer For Flips
Preview Of What You Will Learn Sections: Introduction...5 Using This Manual...7 Section 1: General Property Information...8 Section 2: Property Values & Pricing......9 Section 3: Financing Costs...12 Section
More informationReal Estate & REIT Modeling: Quiz Questions Module 1 Accounting, Overview & Key Metrics
Real Estate & REIT Modeling: Quiz Questions Module 1 Accounting, Overview & Key Metrics 1. How are REITs different from normal companies? a. Unlike normal companies, REITs are not required to pay income
More informationAdvanced M&A and Merger Models Quiz Questions
Advanced M&A and Merger Models Quiz Questions Transaction Assumptions and Sources & Uses Purchase Price Allocation & Balance Sheet Combination Combining the Income Statement Revenue, Expense, and CapEx
More informationRetail Acquisition Example
Property Information Retail Acquisition Example Project Assumptions Acquisition Assumptions Property Name Retail Acquisition Example Project Type Acquisition Location Austin, TX Acquisition Cost $1,800,000
More information2011 ASSESSMENT RATIO REPORT
2011 Ratio Report SECTION I OVERVIEW 2011 ASSESSMENT RATIO REPORT The Department of Assessments and Taxation appraises real property for the purposes of property taxation. Properties are valued using
More informationApril 12, The Honorable Martin O Malley And The General Assembly of Maryland
April 12, 2011 The Honorable Martin O Malley And The General Assembly of Maryland As required by Section 2202 of the TaxProperty Article of the Annotated Code of Maryland, I am pleased to submit the
More informationCourse Income Approach To Value. Course Description
Course 102  Income Approach To Value Course Description The Income Approach to Valuation is designed to provide the students with an understanding and working knowledge of the procedures and techniques
More informationTHIS IS THE TITLE OF THE DOCUMENT. What You Should Know About CRE Leases
THIS IS THE TITLE OF THE DOCUMENT What You Should Know About CRE Leases Copyright PropertyMetrics.com All Rights Reserved Feel free to email, tweet, blog, and pass this ebook around the web... but please
More informationPublished in Spring 1986 Issue The Real Estate Appraiser & Analyst Society of Real Estate Appraisers 1
(1) Published in Spring 1986 Issue The Real Estate Appraiser & Analyst Society of Real Estate Appraisers 1 Alternative Valuation Methods for Leasehold Properties By Tony Sevelka, AACI, SREA, MAI, CRE Introduction
More informationBroker. Sales Comparison, Cost Depreciation and Income Approaches. Chapter 7. Copyright Gold Coast Schools 1
Broker Chapter 7 Sales Comparison, Cost Depreciation and Income Approaches 1 Learning Objectives Describe the assumptions underlying the sales comparison approach Calculate the various adjustments necessary
More informationDeal Analyzer for Rentals
for Rentals Preview Of What You Will Learn Sections: Introduction... 6 Section 1: Inputs... 10 Section 2: Core Numbers... 13 Section 3: FirstYear Operating Projection... 15 Section 4: FiveYear Operating
More informationBasics of Commercial Real Estate Transactions Day Two
Basics of Commercial Real Estate Transactions Day Two John Rockwell, Partner Energy October 12, 2016 PG&E refers to the Pacific Gas and Electric Company, a subsidiary of PG&E Corporation. 2010 Pacific
More informationBefore the Minnesota Public Utilities Commission State of Minnesota. Docket No. E002/GR Exhibit (LMC1) Property Taxes
Direct Testimony and Schedules Leanna M. Chapman Before the Minnesota Public Utilities Commission State of Minnesota In the Matter of the Application of Northern States Power Company for Authority to Increase
More informationHow to Read a Real Estate Appraisal Report
How to Read a Real Estate Appraisal Report Much of the private, corporate and public wealth of the world consists of real estate. The magnitude of this fundamental resource creates a need for informed
More informationReturn on Investment Model
THOMAS JEFFERSON PLANNING DISTRICT COMMISSION Return on Investment Model Last Updated 7/11/2013 The Thomas Jefferson Planning District Commission developed a Return on Investment model that calculates
More informationb. What cap rate will produce a value of $550,000?
OREA Test #1 Math Review 1. If 25% of the homes in North York have 4 or more bedrooms and 62% have 3 bedrooms, then what number of homes in this community of 85,000 have 3 or more bedrooms? 2. The commission
More informationTenant: Law Firm 4 NAICS: Primary Industry: Offices of lawyers
Tenant: Law Firm 4 NAICS: 541110 Primary Industry: Offices of lawyers Date: 05.25.17 Table of Contents Law Firm 4 132 Main Street TABLE OF CONTENTS TIL Score Executive Summary Tenant Score Information
More informationAn Interactive Feasibility Tool
INSTRUCTION GUIDE Affordable Assisted Living and Community Based Care: An Interactive Feasibility Tool Developed for: The Coming Home Program In partnership with the Robert Wood Johnson Foundation NCB
More informationCHICAGO LOWINCOME HOUSING TRUST FUND MAUI Program Guide and Application (Capital Investment)
2019 MAUI Capital Investment Application CHICAGO LOWINCOME HOUSING TRUST FUND MAUI Program Guide and Application (Capital Investment) (Rev. 123118) Chicago LowIncome Housing Trust Fund Since 1989,
More informationOntario Affordable Housing Calculator Users Guide
Ontario Affordable Housing Calculator Users Guide There are a number of different ways to get help using the Affordable Housing Calculator. 1. How To Videos A series of videos that walk the user through
More informationGENERAL ASSESSMENT DEFINITIONS
21st Century Appraisals, Inc. GENERAL ASSESSMENT DEFINITIONS Ad Valorem tax. A tax levied in proportion to the value of the thing(s) being taxed. Exclusive of exemptions, usevalue assessment laws, and
More informationCheat Sheet 3 Formulas to Know When Investing in MultiFamily Homes
Cheat Sheet 3 Formulas to Know When Investing in MultiFamily Homes Overview There are many factors that go into buying a property size, location, finishes the list goes on and on. When searching for a
More informationb. What cap rate will produce a value of $550,000?
1. If 25% of the homes in North York have 4 or more bedrooms and 62% have 3 bedrooms, then what number of homes in this community of 85,000 have 3 or more bedrooms? 2. The commission on a recent transaction
More informationAMPLE. math. Real Estate a. what you need to know. seventh edition. Linda L. Crawford
w math L Real Estate a +  i what you need to know seventh edition % x = Linda L. Crawford REAL ESTATE MATH What You Need to Know SEVENTH EDITION Linda L. Crawford This publication is designed to provide
More informationThe capitalization rate is essential to any analysis through the income
FEATURES An Argument for Establishing a Standard Method of Capitalization Derivation by Eric T. Reenstierna, MAI The capitalization rate is essential to any analysis through the income capitalization approach.
More informationCOST OF LIVING: IT S NOT JUST ABOUT HOUSING
COST OF LIVING: IT S NOT JUST ABOUT HOUSING When an individual is moving to a higher cost location, a common misunderstanding is that the cost of housing is the only difference in the cost of living. The
More informationContinental Real Estate Services, Inc. ACTIVE TO SOLD ADJUSTMENT File No. Case No. Borrower Property Address City County State Zip Code
ACTIVE TO SOLD ADJUSTMENT Property Generally, when an appraiser appraises a unit in a cooperative project, he or she should use sales of cooperative units as comparables. However, the appraiser may use
More informationHowBad Is. Mark Zoellertakes a common, Commercial Real Estate
Commercial Real Estate HowBad Is Mark Zoellertakes a common, often overlooked, problem and offers a path toward a workable solution. In this first of two articles, Zoeller feels that risk analysts are
More informationCost Segregation Instructor Teaching Schedule (3Hour)
Time Topic Pages Student Objectives 8:308:35 Course introduction Page 2 What is cost segregation? Objective of cost segregation: to increase cash flow Benefit of cost segregation Learning objectives Page
More information8 Units in Salinas. 539 Terrace Dr Salinas, CA List Price: $750,000
For more information contact: Apartment / Investment Broker michael@svmultifamily.com BRE 01327546 List Price: $750,000 Property Refurbished in 2006 with Numerous Upgrades: Roof, plumbing, kitchens, bathrooms,
More informationChapter 8. The Income Approach to Appraisal. Two Approaches to Income Valuation. How Does DCF Differ from Direct Cap? Rationale:
The Income Approach to Appraisal Chapter 8 Valuation Using the Income Approach Rationale: Value of a property is the present value of its anticipated income. Often called income capitalization Capitalize:
More informationThe Honorable Larry Hogan And The General Assembly of Maryland
2015 Ratio Report The Honorable Larry Hogan And The General Assembly of Maryland As required by Section 2202 of the TaxProperty Article of the Annotated Code of Maryland, I am pleased to submit the Department
More informationRaising Your Commercial IQ
Raising Your Commercial IQ Real Estate Investment & Lease Analysis January 2013 0 P age Neil Osborne M.B.A. DL. (604) 9885518 nosborne@investitsoftware.com Investit Software Inc. Toll free 8778781828
More informationANALYTICS & MANAGEMENT OF MIXED INCOME PROPERTY
MIXED INCOME PROPERTY CFO FORUM NEIGHBORWORKS AMERICA TRAINING INSTITUTE KANSAS CITY, MISSOURI Presented by Len Tatem (Tatem Consulting LLC) & John Kelley (CNAHS/HRI Cambridge, MA) DEFINING MIXEDINCOME
More informationNA Calculations Manual
NA Calculations Manual ARGUS Developer 8.0 November 2017 ARGUS Software An Altus Group Company 0 2017 ARGUS Software, Inc. NA Calculations Manual for ARGUS Developer 8.0 November 2017 Published by: ARGUS
More informationApplication for Rent Increase Above the Guideline. A Landlord s Guide
Ce document est disponible en français. Composez le 2049452476. Application for Rent Increase Above the Guideline A Landlord s Guide This guide will help you fill out your Application for Rent Increase.
More informationUse of Comparables. Claims Prevention Bulletin [CP17E] March 1996
March 1996 The use of comparables arises almost daily for all appraisers. especially those engaged in residential practice, where appraisals are being prepared for mortgage underwriting purposes. That
More informationMANHATTAN MARKET REPORT
MANHATTAN MARKET REPORT Q1 MANHATTAN MARKET REPORT 1Q 2017 Manhattan s residential market is showing signs of improvement after a period of uncertainty leading up to the Presidential election, as it does
More informationHow to Determine the Value of a Storage Property from Financial Reports. Presented by: Joe Linsalata
How to Determine the Value of a Storage Property from Financial Reports Presented by: Joe Linsalata Building your Proforma Use an Excel spreadsheet or an equivalent Always use formulas, stay away from
More informationPOMONA APARTMENTS. 102 Pomona Ave, Long Beach, CA Jack McCann (310)
POMONA APARTMENTS 102 Pomona Ave, Long Beach, CA 90803 Table of Contents Professional Bio... 3 Property Description... 4 Property Photos... 5 Location Map... 6 Demographics... 7 Unit Mix Report... 8 Executive
More informationRent Stabilization, Vacancy Decontrol and Reinvestment in Rental Property in Berkeley, California
Rent Stabilization, Vacancy Decontrol and Reinvestment in Rental Property in Berkeley, California REVISED FINAL REPORT July 16, 2012 Jay Kelekian, Executive Director Stephen Barton, Ph.D., Project Manager
More informationPrerequisites. Introduction CHAPTER OUTLINE
Prerequisites 1 Figure 1 Credit: Andreas Kambanls CHAPTER OUTLINE 1.1 Real Numbers: Algebra Essentials 1.2 Eponents and Scientific Notation 1.3 Radicals and Rational Epressions 1.4 Polnomials 1.5 Factoring
More information1173 Fortune Boulevard, Shiloh, Illinois Office (618) Fax (618)
6,240 Sq. Ft 2 levels 100% Leased to Long Term Tenants 10.22% CAP Rate based on actual Low Operating Expenses New Roof & Remodeled 1 st Floor Located in Copper Bend Sale: $550,000 ($88.14 per Sq. Ft.)
More informationSales Ratio: Alternative Calculation Methods
For Discussion: Summary of proposals to amend State Board of Equalization sales ratio calculations June 3, 2010 One of the primary purposes of the sales ratio study is to measure how well assessors track
More informationNational Housing CoInvestment Fund APPLICATION GUIDE FOR FINANCIAL VIABILITY WORKBOOK  NEW CONSTRUCTION
National Housing CoInvestment Fund APPLICATION GUIDE FOR FINANCIAL VIABILITY WORKBOOK  NEW CONSTRUCTION TABLE OF CONTENTS About the Financial Viability Workbook... 3 Rents Affordability (Tab 2)... 3
More informationFully Stabilized 24Unit Property at 11% Cap Rate!
Fully Stabilized 24Unit Property at 11% Cap Rate! To Insert a Picture here, click inside this box with your mouse, then click on "INSERT PIC" button on the right and select the picture 24 Units consisting
More informationGuide to Section 8 ProjectBased Housing
There are a number of Section 8 projectbased rental units in the City of Philadelphia. These units are subsidized for low and moderate income tenants. The subsidy is funded by the U.S. Department of Housing
More informationBusiness Valuation More Art Than Science
Business Valuation More Art Than Science One of the more difficult aspects of business planning is business valuation. It is also one of the more important aspects. While owners of closely held businesses
More informationThe Ultimate Guide To: DC CONDO CONVERSIONS. Authored by the Washington Capital Partners Team
The Ultimate Guide To: DC CONDO CONVERSIONS Authored by the Washington Capital Partners Team So, what is a condo conversion? Added 4th Floor Unit 2 Existing Structure (Floors 1, 2, &3) Unit 1 Washington,
More informationSample Exam 2 Textbook Rationales
Sample Exam 2 Textbook Rationales 1. d The agreement between landlord and tenant here is a tenancy at will. The tenant is free to move out at any time, and the landlord can tell the tenant it s time to
More information7224 Nall Ave Prairie Village, KS 66208
Real Results  Income Package 10/20/2014 TABLE OF CONTENTS SUMMARY RISK Summary 3 RISC Index 4 Location 4 Population and Density 5 RISC Influences 5 House Value 6 Housing Profile 7 Crime 8 Public Schools
More informationDania Beach Multi Family 126 NW 8th Ave Dania Beach, FL 33004
Dania Beach Multi Family Turn key apartment bulling with full management services in place. Completely renovated property with impact windows and newer roof. 8.07% Cash on Cash return with 30% down payment.
More information