Pre Certification Study Flashcards
Where should you orientate your assumptions on the worksheet?
User preference
Do sources & uses need to tie?
Yes/True, should be =
What is the best way to determine a vacancy rate?
Mkt reports
Property Comps
Ask a Broker
Historic Data
(all the above)
What is the management Fee calculated off of?
EGI (expected gross income)
If you had a hold period of 7 years, how many columns could you have in the model?
9 columns
Year 0: Day you buy property
Year 1-7: holding period
Year 8: Terminal year (calc. sale price and buyers next year)
What is the most reliable source of data to determine your operating expenses?
Prior 3 years
What are sources + uses
sources: where the money comes from
uses: how you use it
What are two big pieces of sources?
Equity + debt
What is a hold period?
The length of time that you own the property.
Which of the following items would not be included in the Year 0 UNLEVERED value.:
Purchase Price
Debt Origination
Capital Projects
Closing Costs
Debt originations (money that the bank is charging the borrower to get the loan)
Which of the following is not UNLEVERED return metric:
IRR
Equity Multiple
Debt Yield
Cash on cash
Profit
Debt Yield
What are capital projects?
Things like renovations, projects planned for property
What does debt yield do?
Not a return metric
It is a metric from lenders perspective
NOI/ loan amount
What does profit show you?
$ making off the deal
What is cash on cash?
relationship between the income/dollars having against what you initially outlaid when you bought the property
(ex: property $100
yr 1: $10
cash on cash = 10/100=10%)
