Industry Essentials

Question 1

How many americans live in rental housing?

Answer 1

1/3 and increasing

Question 2

2 categories of renters

Answer 2

By choice and by circumstance

Question 3

Renters decide to rent for a variety of reasons. What are the most most common?

Answer 3

Location, housing cost, size, life circumstance

Question 4

What is a CAM’s role?

Answer 4

Maximize value, collect rent, make purchasing decisions, process invoices, pay bills.

Question 5

The use of funds to earn a profit is…

Answer 5

An investment

Question 6

What are the lifecycles of multifamily housing?

Answer 6

Growth, stability, decline, revitalization/rehabilitation

Question 7

Who are the an advocate for?

Answer 7

Investors and residents

Question 8

What bridges the advocacy for investors and residents

Answer 8

Ethics

Question 9

What are different housing types?

Answer 9

Multifamily, income amount, type of resident, type of ownership, duration of use

Question 10

Property classification of low cap high unit prices

Answer 10

Class A

Question 11

As an investor advocate, what are your primary goals?

Answer 11

Meet financial goals and add value

Question 12

What are the 4 main financial functions of a CAM

Answer 12

Analyze income, minimize financial loss, manage expenses, monitor budgets

Question 13

What is GPR?

Answer 13

Gross Potential Rent-Rent collected if 100% occupied at market rent

Question 14

What is GPI?

Answer 14

Gross Potential Income-rent on occupied units at existing rent and vacant units at market rent

Question 15

What is an income statement?

Answer 15

Revenue and expenses over a period of time. Compares financial activity against budget.

Question 16

What is VAC?

Answer 16

Total value of rent loss from vacant units, concessions, collection losses, and non-revenue units.

Question 17

GPI-VAC will give you what?

Answer 17

TRR-Total Rental Revenue

Question 18

How do you get operating expense ratio?

Answer 18

Operating expense (OE) / (EGI) effective gross income

Question 19

What is a group of accounts that support the major financial statements.

Answer 19

General Ledger

Question 20

What are sub-accounts (or ledgers) or chart of accounts?

Answer 20

Assigned names or numbers that provide details of financial activities that occurred

Question 21

What are types of financial loss?

Answer 21

Vacancy loss, offline units, concessions, bad debt

Question 22

How can you manage expenses?

Answer 22

Control expenses, make expenditures judiciously, manage preventive maintenance programs to minimize future expenses and Identify, plan, & implement capital improvement programs

Question 23

What are expenses types?

Answer 23

Fixed, variable, capital, debt services including replacement reserve

Question 24

What are examples of fixed expenses?

Answer 24

Insurance, taxes, depreciation

Question 25

What are examples of variable expenses?

Answer 25

Utilities, admin, recurring repairs, payroll, marketing, landscaping

Question 26

Large improvements that have an economic life of more than one year are..

Answer 26

Capital expenses

Question 27

What is a replacement reserve?

Answer 27

Money set aside for anticipated future expenditures

Question 28

Mortgage or loans payments

Answer 28

Debt services

Question 29

What is a cost benefit analysis?

Answer 29

Weighing potential expenses against potential benefit

Question 30

What are the 3 types of budgets?

Answer 30

Lease-up, rehab/renovation, operating

Question 31

How do you annualize data?

Answer 31

Estimate from date over a year

Question 32

What is extrapolation?

Answer 32

A prediction

Question 33

What is marketing?

Answer 33

Integrated and coordinated activities that encourage people to initially rent or continue renting

Question 34

What are the 5 P's of the marketing mix?

Answer 34

Product, place, promotion, people, price

Question 35

What is a marketing plan?

Answer 35

It is a detailed, written account and timetable of the objectives and methods to be used to achieve the property’s marketing goals

Question 36

When is a marketing plan created?

Answer 36

Critical need, repositioning, problem solving, sustaining

Question 37

What is supply and demand?

Answer 37

When demand is low and supply is high, rents must be competitive. If demand is high and supply is low, higher prices can be obtained.

Question 38

What is the difference between net and market rent?

Answer 38

Net rent is the result of subtracting any programs that reduce the market rent.

Question 39

Calculate effective rent: 150 units = 120,550

Answer 39

120,550/150 = 803.67

Question 40

What is SMART?

Answer 40

Specific, measurable, attainable, relevant, timely

Question 41

What are types of promotion?

Answer 41

Advertising, public relations, sales promotion, internal marketing, relationship selling

Question 42

What is AIDA?

Answer 42

Attention, interest, desire, action

Question 43

What is a SWOT analysis?

Answer 43

Identifying strengths, weaknesses, opportunities and threats.