Formulas Flashcards
Square Footage
Length x Width
* Length is the same as “depth”
Acreage
Square Footage/ 43,560
* in most acreage problems you’ll first have to calculate Square footage
Volume
L x W x H
*Length is the same as “depth”
Loan amount
Sales Price x % of Loan to value (LTV)
Income Approach to Value - Capitalization
Value = Net Operating Income / Cap Rate
*Use the triangle
Effective Gross Income
Effective Gross Income =
Total Potential Gross Income - Vacancy and Collections
*Vacancy and collections is INCOME LOSS due to vacant units, uncollected rent, uncollected fees
Total Potential Gross Income
Total Potential Gross Income =
Potential Gross Income + Any additional income
Annual Interest Rate
Annual Interest = Principle x Interest Rate
*Principle is either:
For Buyer = Loan Amount
For Seller = Remaining Balance of
mortgage
Daily Interest Rate
Daily Interest = Annual Interest / 360 x # of days
