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Construction Basics > Ch 18 > Flashcards

Ch 18 Flashcards

1
Q

What is the only legal way to evict someone?

A

Court Order

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2
Q

What are the differences between constructive eviction and actual eviction? Which one is legal?

A

Constructive- when LL make RE uninhabitable so tenant will move (turns off heat, h2o, elect., etc)- illegal
Actual-
a) court order (legal)
b) LL puts tenant’s stuff on street & changes locks (illegal

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3
Q

What is it called when the when LL make RE uninhabitable so tenant will move (turns off heat, h2o, elect., etc)?

A

Constructive Eviction

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4
Q

What happens if a tenant is legally evicted and still doesn’t leave?

A

NYC marshall removes tenant

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5
Q

What is a % lease?

A

When tenant pays a % of sales in addition to rent in order to save money

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6
Q

Q. Sam’s store pays $12,000/ year rent. Overage is 7.5%. If Sam’s sales are $150,000 this year, what is his total rent?

A

A. $12,000.

Find Breakpoint:
Rent/Overage=Breakpoint
12k/7.5%=160k (breakpoint)
150k sales < 160k (did not reach breakpoint)

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7
Q

What is a store that attracts shoppers to the center?

A

The Anchor (Mall: Macy’s vs Claire’s)

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8
Q

What is the “anchor” at a shopping center?

A

The larger store that attracts shoppers

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9
Q

Where would you be likely to see cluster zoning?

A

A PUD

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10
Q

What is a PUD?

A

Planned Unit Development

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11
Q

What is cluster zoning and where are you likely to see it?

A

Diff kinds of uses in the same area (sky scraper + house + apt building); a PUD

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12
Q

What is a net lease of industrial property?

A

Tenant pays tax, insurance, and maintenance in return for low rent

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13
Q

What is it called when tenant pays tax, insurance, and maintenance in return for low rent?

A

Net Lease

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14
Q

Where would you see a net lease?

A

Single tenant retail or industrial (i.e. Walgreens in ESB = no net lease; Walgreens in Buffalo= net lease)

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15
Q

What is the difference between agency and property manager?

A

agency= rep someone

prop mngr= rep owner

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16
Q

What kind of agent is a property manager?

A

General Agent (does multiple things)

17
Q

What kind of agent is a REA?

A

Special Agent (does 1 thing)

18
Q

What is the 1st thing a property manager signs with the LL?

A

Management Agreement

19
Q

What is the most important party of Property Management?

A

Budget & Financials; financial reporting

20
Q

What is another word for capital expenses?

A

Capital Investments

21
Q

What is the real idea of income and expenses over 5 years?

A

Stabilized Budget

22
Q

What is Stabilized Budget?

A

the real idea of income and expenses over 5 years

23
Q

What document tells the owner the typical income and expenses of the building after 5 years?

A

Stabilized Budget

24
Q

What is the max amount the building could make if all units were rented at full market value with no vacancy or collection loss?

A

Potential Gross Income = ideal

25
Q

What is effective gross income?

A

Potential gross income
- (vacancy + collection loss)
+ other non-rental income

26
Q

What is NOI?

A

Net Operating Income:
Effective Gross Income
- Expenses (fixed + variable)
NOI

27
Q

What is PGI?

A

Potential Gross Income; the max amount the building could make if all units were rented at full market value with no vacancy or collection loss

28
Q

Pam’s building has 4 apts rented at $500/ month. 1 apt is vacant. Laundry machines make $1000/ year. What is PGI?

A

$24,000.

(4 apt x $500) x 12 months
laundry, vacancy unimportant

29
Q

Sam’s building makes $7500/ month gross income. Expenses are $45,000/ year. Pam will buy it if she can get a 12% rate of return. How much should Pam pay?

A

$375,000.

IRV= income/ rate of return = Value

7500x12=90,000 EGI
- 45,000 expenses
= 45,000 NOI

45,000/ 12%= $375,000

Construction Basics (8 decks)

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