Some variable loans come with options to convert them to a fixed loan based on a predetermined formula, during a given time period. For example the 1-year tbill adjustable
may be converted to a fixed during the first five year
CHAPTER 6 - THE REAL ESTATE CASH FLOW MODEL
The real estate cash flow model is the core of the real estate investment decision
model. The cash flow model begins with the rental of all available rental space and ends
with after tax cash flows
CHAPTER 7- DECISION MAKING: RATIO AND DCF ANALYSIS
The objective of an analysis of real estate asset cash flows is an attempt to
determine the acceptance or rejection of the real estate asset as an investment. The
analysis can be a very ge
FIN 3509/Ch 6/The Midway Apartments, AllCash.Years1-6.Net
Assume you are considering an all cash purchase of the Midway Apartments
residential apartment complex composed of 30 one-bedroom units and 10 twobedroom units. The property is listed for $2,500
The Scott Building Deal
One of your many friends is Bob Scott. Mr. Scott (Scott to his friends) has an extensive
background in steel fabrication and the construction of metal and metal alloy buildings
for warehouse and industrial use. Scott currently owns
CHAPTER 8 THE RECONSTRUCTION OF OPERATING STATEMENTS &
THE OPERATING STATEMENT
Operating statements are presentations of cash flow receipts associated with the
rental of real estate space. Specifically the operating statement begins
CHAPTER 8 - THREE CASES
The Flat Creek Building
You are considering the purchase of a small industrial warehouse in the town of Flat Creek for
$4,650,000. The building has 40,000 square feet (sf) of warehouse space and another 1,000 sf of
office space in
LS#8B Operating Statement.Solutions.S2015
Flat Creek Warehouse
PGI (40,000 X $12) + (1,000 x $18)
-Vacancy (40,000 x .10 x $12)
Effective Gross Income
- Operating Expenses (OE)
FIN 3509/Mill Hill Office Building.Fall2015/Huffman
You are considering buying the Mill Hill Office building for $5,900,000. The property
has three stories with a total rentable square footage of 32,000 square feet (sf). The
building is designed for one t
CONTROL AND OWNERSHIP
The ability to invest and finance real estate depends first upon the ability of the
investor to control the physical asset. This control is dependent upon the type of
ownership rights in the property held by th
Real Estate Fundamentals
The Implied Warranty of Habitability indicates a promise that the
landlord must provide residences that are fit for human habitation, even
when the lease does not specifically enforce the duty on the landlord; this is
An insurance policy that covers property damage due to natural flooding. Flood insurance
may be required on properties in a flood zone.
A legal process by which the lender forces a sale of a property
Bonus Real Estate
Real estate with free and clear title.
Land that has received no development.
A document that transfers title from the grantor to the grantee without recording (i.e.
Final Real Estate
A form of property ownership under which a property is held by a number of people, each
with the right of possession for a specified time interval. Time sharing is used mostly for
Evidence that the o
Repaying an existing loan from the proceeds of a new loan on the same property.
When a mortgage is paid off in full, the lender conveys the property back to the owner.
The act of entering into a book of publi
Net Effective Income
The borrowers gross income minus federal income tax.
Loans that do not comply with Fannie Mae or Freddie Mac guidelines.
A written instrument that acknowledges a debt and promises to pay.
Real estate Glossary Terms 1.0
Abstract (of Title)
A historical summary of all the recorded transactions that affect the title to the property.
An attorney or a title company will review an abstract of title to determine if there are any
1. A debt instrument in the capital markets. The U.S. government, corporations and
municipalities use bonds to raise money. Bonds can also be backed by mortgages. The
best known bond is the 30-year treasury bond issued by the U.S. government.
2. A su
Real estate 3.0 Terms
Cloud on Title
An outstanding claim or encumbrance that, if valid, would affect or impair the owner's
title. Compare with clear title.
A written document provided by a lender to agreeing to make a loan on specific terms to
Prepaid interest is the interest charged to borrowers at closing to pay for the cost of
borrowing for a balance of the month. For example, if a loan closes on the 19th of the
month and the first payment is due on the 1st of th
The Antioch Road Apartments Operating Statement
The Antioch Road Apartments complex is for sale for $40,000,000. The 300-unit
complex is composed of 190 one-bedroom (1B) units; 75 two-bedroom (2B) units; and
35 three-bedroom units. The complex has 200 par