Ch 18 Flashcards
What is the only legal way to evict someone?
Court Order
What are the differences between constructive eviction and actual eviction? Which one is legal?
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
What is it called when the when LL make RE uninhabitable so tenant will move (turns off heat, h2o, elect., etc)?
Constructive Eviction
What happens if a tenant is legally evicted and still doesn’t leave?
NYC marshall removes tenant
What is a % lease?
When tenant pays a % of sales in addition to rent in order to save money
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. $12,000.
Find Breakpoint:
Rent/Overage=Breakpoint
12k/7.5%=160k (breakpoint)
150k sales < 160k (did not reach breakpoint)
What is a store that attracts shoppers to the center?
The Anchor (Mall: Macy’s vs Claire’s)
What is the “anchor” at a shopping center?
The larger store that attracts shoppers
Where would you be likely to see cluster zoning?
A PUD
What is a PUD?
Planned Unit Development
What is cluster zoning and where are you likely to see it?
Diff kinds of uses in the same area (sky scraper + house + apt building); a PUD
What is a net lease of industrial property?
Tenant pays tax, insurance, and maintenance in return for low rent
What is it called when tenant pays tax, insurance, and maintenance in return for low rent?
Net Lease
Where would you see a net lease?
Single tenant retail or industrial (i.e. Walgreens in ESB = no net lease; Walgreens in Buffalo= net lease)
What is the difference between agency and property manager?
agency= rep someone
prop mngr= rep owner
What kind of agent is a property manager?
General Agent (does multiple things)
What kind of agent is a REA?
Special Agent (does 1 thing)
What is the 1st thing a property manager signs with the LL?
Management Agreement
What is the most important party of Property Management?
Budget & Financials; financial reporting
What is another word for capital expenses?
Capital Investments
What is the real idea of income and expenses over 5 years?
Stabilized Budget
What is Stabilized Budget?
the real idea of income and expenses over 5 years
What document tells the owner the typical income and expenses of the building after 5 years?
Stabilized Budget
What is the max amount the building could make if all units were rented at full market value with no vacancy or collection loss?
Potential Gross Income = ideal
What is effective gross income?
Potential gross income
- (vacancy + collection loss)
+ other non-rental income
What is NOI?
Net Operating Income:
Effective Gross Income
- Expenses (fixed + variable)
NOI
What is PGI?
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
Pam’s building has 4 apts rented at $500/ month. 1 apt is vacant. Laundry machines make $1000/ year. What is PGI?
$24,000.
(4 apt x $500) x 12 months
laundry, vacancy unimportant
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?
$375,000.
IRV= income/ rate of return = Value
7500x12=90,000 EGI
- 45,000 expenses
= 45,000 NOI
45,000/ 12%= $375,000
