Math Calculations Flashcards
Variable Lease Calculation
New Index divided by the Old Index. Multiple by original rent.
unit rents $12/sq ft. with an index of 1.5 what is the new rent rate when the Consumer Price Index increases to 1.8?
- 8 divided by 1.5 = 1.2
- 2 x $12 = $14.40
Equity Calculation (Different between Value and Mortgage debt)
Balance 325k value 400k how much equity
400-325 = 75k
PITI
Principal, interest, taxes and insurance. Be careful to not mix a monthly with an annual number.
Lender’s Discount points yield
each point paid increases the yield by 1/8% to the stated interest.
Lender charges 2 discount points on a 120k loan at 6%.
2/8ths + 6% = 6 1/4% yield
Discount point cost to borrower
Each point is 1% of LOAN AMOUNT.
120K loan. whats the cost of 2 points? = 120k * .002 = 2400
LTV Calculation (Loan to value)
Loan amount divided by Value = LTV Ratio
234k loan on a 260k value home
234/260 = .9 or 90% LTV
Lender will do 80% LTV on a 150k home = Whats the loan amount? 150k * .8 = 120k
Acreage Calculation in a tract if there is an AND in the description calculate each side seperately then add them together
SW 1/4, NE 1/4, SE 1/4, NW 1/4, of Sec 12, T3S, R4E
640 = Acres in a Section
640 / 4 / 4 / 4 / 4 = 2.5 acres
a lot is 1/8 of a mile by 1/4 mile. how many acres?
1 mile = 5280 ft and 1 acres = 43,560 sq ft 5280 / 8 = 660 ft 5280 / 4 = 1320 ft 660*1320 = 871,200 sq ft 871,200 / 43,560 = 20 Acres
Occupancy Rate
Occ units / Total units
200 rented / 250 total = .8 or 80%
Adjusted Sale Price Calculation
comp sold for 30 k in better area but is smaller
5k different for neighborhood
4k in size
30k - 5k + 4 k = 29k
Reconciliation Calculation
Comp a 255k * .35 = 89,250
Comp b 262k * .2 = 52,400
Comp c 250k * .45 = 112,500
total = 254,150 average
Accrued Depreciation Formula
The effective age of the property / Total real age * new reproduction cost = Accrued Depriciation
Accrued Depreciation Formula
The effective age of the property / Total economic life (expected period of time during which an asset remains useful to the average owner) * new reproduction cost = Accrued Depreciation
Reproduction cost 207,700 effective age 4 yrs. economic life 60 yrs
4/60=.0666666 * 207,700k = 13,847
Accrued depreciation formula 2
Reproduction cost / total age = annual depreciation
annual depreciation x effective age = accrued depreciation
Annual Depreciation
Reproduction cost / total age = annual depreciation
Effective Gross Income
Potential income - losses + other income
Net Operating Income
Effective gross income - operating expenses
IRV Formula
I = NOI
R = CAP RATE
V = VALUE
CAP RATE X VALUE = NOI
NOI / VALUE = CAP RATE
NOI / CAP RATE = VALUE
What is the value of a property with NOI 60k if the market cap rate is 10% = 60k / .1 (10%) or * 10 = 600,000 VALUE
Find cap rate of NOI 57,600 VALUE OF 720,000
57600 / 720000 = .08 OR 8 % CAP RATE
VALUE 1,200,00 CAP RATE 12% FIND NOI
.12 * 1,200,000 = 144,000 NOI
How to find Estimated Market Value Based on Gross Market Multiplier (GRM)
Sale Price / Monthly rent
Comp 1: 120,400 / 1225 = 98.29 Comp 2: 126,000 / 1275 = 98.82 Comp 3 132,000 / 1350 = 97.78 Add / 3 = 98.3 Market GRM 1200 rent x 98.3 GRM = $117,960 Value
Annual Interest paid to the lender
125k loan balance @ 5 and 3/4 % rate
125k * .0575 = $7,187.50
Profit Formula
Amount made / total cost = % Profit
lot cost 28k sold for 35k
35-28 = 7k
7k / 28k = .25 or 25% profit
loss formula
the amount lost on sale / total cost
Cost 125k sold for 100k
100k - 125k = -25k
-25k / 125k = .20 or 20 % loss
Proration for assumed loan calculation
Balance 110,350 @ 4%. Closing day is April 10 mortgage payment due May 1.
110,350 * .04 = 4414
4414 / 365 = 12.93 per day
12.93 * 9 days = 108.84 debit to seller credit to buyer
FL state transfer tax
Doc Stamps on DEEDS .70 per $100 of sale price Doc Stamps on PROMISSORY NOTES .35 per $100 State INTANGIBLE TAX ON MORTGAGE .002 PER $1 BORROWED
House sells for 150,025
150,025 / 100 = 1500.25 or 1501 x .7 = 1050.70 for DEED
150,025 / 100 = 1500.25 or 1501 x .35 = 525.35 for Prom Note
Borrowed 125,000 * .002 = $250
Calculating HER for Conventional Mortgage Qualifications MAX 36% TOR
Monthly housing expenses (PITI) / MONTHLY GROSS INCOME = HER (Housing Expense Ratio)
PITI & DEBT 1470 / 5880 INCOME = .25 OR 25%
Amortizing a mortgage Calculation
Principal * Annual interest / 12 for 1st months interest
monthly payment - 1st months interest is the amount to principal
Beginning balance - amount to principal = new principal
repeat steps with new principal to get next months payment and so forth
