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Real Estate National Key Facts > N10 Income Appraisal & Environmental Issues > Flashcards

N10 Income Appraisal & Environmental Issues Flashcards

1
Q

The process of converting income to value.

A

Capitalization

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2
Q

The period of time over which a property will produce income and be economically beneficial to the owner.

A

Economic Life

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3
Q

The formula for calculating the net income is:

A

Gross Income
- Operating Expenses
_______________
= Net Income

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4
Q

The rate of return that an investor desires and by which net income is converted to value is the ______.

A

Capitalization Rate (Cap Rate)

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5
Q

The cap rate is a reflection of an investment’s _____.

A

Risk

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6
Q

The memory circle formula for the income approach to value is:

A

Net Income
_______________ or Net Income ÷ (Value * Cap Rate)
(Value) * (Cap Rate)

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7
Q

Using the I =RV formula: Value =

A 
I = Net Income V= Value R = Cap Rate
I = RV is equal to Net Income= Cap Rate* Value
V = I/R  thus  Value = Net Income/Cap Rate
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8
Q

Using the I =RV formula: Cap Rate =

A 
I = Net Income V= Value R = Cap Rate
I = RV is equal to Net Income= Cap Rate* Value
R= I/V is equal to Cap Rate = Net Income/ Value
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9
Q

Using the I =RV formula: Net Income =

A 
I = Net Income V= Value R = Cap Rate
I = RV is equal to Net Income= Cap Rate* Value
I = RV  thus  Net Income = Net Income= Cap Rate* Value
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10
Q

GRM stands for:

A

Gross Rent Multiplier

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11
Q

The formula for calculating value using a GRM is:

A

Value = Rent or Gross Income x GRM

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12
Q

The formula for calculating a GRM from a comparable sale is:

A

GRM = Sale Price (of comparable) ÷ Rent (of comparable)

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13
Q

Reconciliation

A

The process of bringing appraisal data together to arrive at a final estimate of value.

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14
Q

Arizona real estate agents may prepare property evaluations for a fee but may not call the evaluation an _____. However, they may call it a ______.

A

Appraisal, Broker Priced Opinion

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15
Q

The federal government agency that regulates environmental issues is the ____________________.

A

Environmental Protection Agency (EPA)

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16
Q

The Arizona state agency that regulates environmental issues is the _________________________.

A

Arizona Department of Environmental Quality (ADEQ)

17
Q

The Arizona state agency that regulates water law is the ________________________________.

A

Arizona Department of Water Resources (ADWR)

18
Q

The Arizona Commissioner’s Rules require ___________ of environmental problems.

A

Disclosure

19
Q

Lead

A

A toxic substance found in the paint of buildings constructed prior to 1978.

20
Q

Buyers and lessees of pre 1978 buildings must be given copies of _____ and a _____.

A

Reports, Lead Paint Booklet

21
Q

Buyers of pre 1978 buildings must be given the right to ______ the property prior to becoming _________ under the _________ contract.

A

Inspect, Obligated, purchase

22
Q

A naturally occurring gas that is known to cause lung cancer.

A

Radon

23
Q

A fiber that can cause respiratory diseases.

A

Asbestos

24
Q

Asbestos in buildings is dangerous when it becomes _______.

A

Friable (easily crumbled)

25
Q

Encapsulation

A

The most common method of abating asbestos.

26
Q

______ is often caused by Excess Moisture in buildings.

A

Mold

27
Q

__________ can allow mold to thrive.

A

Airtight Windows

28
Q

The general process of investigating a property to determine is hazardous substances exist is _____ aka ________.

A

Discovery aka Due Diligence

29
Q

The process of inspecting a property, reviewing public records and interviewing former owners and tenants to determine if contamination exists is a ____________.

A

Phase 1 Assessment

30
Q

Phase II Assessment.

A

The process of taking and analyzing soil samples to determine if contamination exists.

31
Q

Comprehensive Environmental Response, Compensation & Liability Act abbreviated as ______.

A

CERCLA

32
Q

CERCLA created _________.

A

Super Funds

33
Q

Water Quality Assurance Revolving Fund or ______.

A

WQARF

34
Q

All ______ and _____ owners may be liable for environmental cleanup. This is called _____ liability.

A

Current and Former, Strict

35
Q

The flat portion of land located along rivers and streams that is often subject to flooding is a _______.

A

Floodplain

36
Q

The federal agency that has created floodplain maps .

A

FEMA Federal Emergency Management Agency

37
Q

Wetland

A

Land areas where ground water is at or near the surface so as to produce a watery plant community.

38
Q

In Arizona, the _____ is required to have a septic tank or other on-site waste water facility inspected within __ Months of transferring a property.

A

Seller, 6 months

39
Q

The ____ of the property must complete the waste water facility “Notice of Transfer” within __ days of purchase.

A

Buyer, 15 Days

Real Estate National Key Facts (14 decks)

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