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RICS Investment and Finance Pathway > Property Finance And Funding Level 1 > Flashcards

Property Finance And Funding Level 1 Flashcards

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1
Q

How do you source, collate and present information to secure the financing of the purchase of property?

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2
Q

How do you structure an investment in terms of senior debt to be acceptable to lenders?

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3
Q

Within a financing documentation, what is an inter-creditor agreement used for?

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4
Q

Describe various ways of financing a property investment.

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5
Q

How do you assess the true cost of finance?

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6
Q

Does the property market impact on financing or is it the other way around?

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7
Q

Describe the methods and tools to secure financing in a property investment.

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8
Q

Describe the financing conditions in the UK and explain the reasons behind their evolution during the past three years.

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9
Q

What are current LTV ratios / interest coverage ratios / debt service coverage ratios / spread?

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10
Q

How can you hedge against interest rate risk and currency risk?

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11
Q

Explain recent trends in the property financing market.

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12
Q

What information does your client need to provide to secure a property loan?

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13
Q

What are the main terms of a loan agreement in your experience?

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14
Q

Talk me through the types of senior debt providers, and their expectations in terms of pricing and security.

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15
Q

What is the impact of gearing on equity returns?

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16
Q

How do you demonstrate this gearing numerically?

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17
Q

How can mezzanine and equity finance be priced?

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18
Q

Talk me through how the financing process works.

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19
Q

How do you use financial information such as audited report and accounts?

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20
Q

What financial information relevant to property finance and funding do you look for in an audited report?

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21
Q

What are the main risks a bank wants protection from when granting a property loan?

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22
Q

Why is commercial property financed?

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23
Q

How can this be used to increase investment returns?

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24
Q

Explain what you understand by debt and equity finance.

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25
Q

Why would each be used?

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26
Q

What are the pros and cons of each?

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27
Q

What is a non-traditional lender?

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28
Q

Why might you use a non-traditional lender over a traditional bank for lending?

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29
Q

What is a RCF?

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30
Q

How do RCFs work in practice?

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31
Q

Who might have a RCF?

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32
Q

What is a lending platform?

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33
Q

What is a charge?

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34
Q

What does recourse mean?

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35
Q

What is a commercial mortgage?

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36
Q

How are commercial mortgage rates set?

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37
Q

What is an unsecured loan?

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38
Q

What is this supported by?

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39
Q

Why is this risky and how does this affect the interest rate?

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40
Q

What is secured debt?

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41
Q

What security or collateral may be used?

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42
Q

What is a floating charge?

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43
Q

What is a security?

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44
Q

What is a lien?

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45
Q

Does a floating charge affect a business’ ability to use the underlying asset as normal?

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46
Q

How does property development finance work?

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47
Q

How do property development interest rates compare to commercial mortgage rates?

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48
Q

What is bridging finance and who is it typically used by?

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49
Q

How do bridging rates account for risk?

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50
Q

How long is bridging finance typically used for?

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51
Q

What is mezzanine finance?

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52
Q

How is this priced?

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53
Q

When is it typically used?

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54
Q

What is portfolio finance?

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55
Q

What is Sharia finance?

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56
Q

What principles is this based on?

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57
Q

How can a project be financed using a JV?

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58
Q

What is securitisation?

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59
Q

Explain what a bond is.

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60
Q

What risk factors affect the pricing of finance?

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61
Q

Explain how due diligence works during the financing process.

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62
Q

What is loan underwriting and how does it work?

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63
Q

What 3 types of due diligence are likely to be carried out?

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64
Q

What will each consider specifically?

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65
Q

What is a loan agreement and a letter of undertaking?

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66
Q

What is the impact of each?

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67
Q

What must a loan agreement include?

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68
Q

What enforcement provisions may be included?

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69
Q

What corporate documents are you aware of?

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70
Q

What are the 3 types of lien? What are they used to ensure?

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71
Q

What is a mortgage deed?

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72
Q

What is a trust deed?

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73
Q

What is a trust deed?

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74
Q

What are step-in rights?

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75
Q

What are guarantees and indemnities used for?

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76
Q

What are miscellaneous charges used for?

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77
Q

What does redemption mean?

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78
Q

When and why may a penalty be placed on redemption?

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79
Q

What is a deed of release?

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80
Q

How are charges registered?

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81
Q

What is a covenant?

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82
Q

What are the 2 types of loan covenant?

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83
Q

Explain refinancing strategies you are aware of.

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84
Q

Why is refinancing important?

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85
Q

What reasons are there for refinancing?

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86
Q

How can a lender hedge risk in the capital markets?

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87
Q

What is a swap?

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88
Q

How can you model the effects of debt and equity?

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89
Q

What is the replacement for LIBOR and what is the reason for the transition?

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90
Q

What is bridging finance?

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91
Q

What typical terms might be agreed for bridging finance?

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RICS Investment and Finance Pathway (54 decks)

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