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Appraisal - General > Section 1 Fundamentals > Flashcards

Section 1 Fundamentals Flashcards

0
Q

Littoral

A

Water rights non flowing

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1
Q

Riparian

A

Flowing water rights

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2
Q

Area of a circle

A

Pi R2

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3
Q

Area of an oval

A

Pi •r1•r2

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4
Q

Rt

A

Terminal cap rate

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5
Q

Enablements

A

annual plants & crops

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6
Q

Appurtenant

A

added to the land and passes with title (easement, tree)

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7
Q

Attachment

A

lien

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8
Q

Entitlement

A

governmental approval

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9
Q

Investment value

A

value to a lass of investor based on investment criteria

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10
Q

Use value

A

value for a specific use to a specific user

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11
Q

Enterprise value

A

used to be business value

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12
Q

Points

A

1% of the loan

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13
Q

Fair value

A

accounting term/also a term used in tax assessment

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14
Q

Market area

A

area with subject and a majority of the subject’s competition

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15
Q

Competitive Market area

A

area with the subject and all of its competition

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16
Q

Money markets

A

market trading short term money instruments < one year

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17
Q

Capital markets

A

market trading long term money instruments > one year

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18
Q

Hypothetical condition

A

known to be false

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19
Q

Extraordinary assumption

A

uncertain information assumed to be correct

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20
Q

Stabilized occupancy

A

level of occupancy for a specific property or class of property when it is capturing its appropriate share of demand

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21
Q

Transitional vacancy

A

vacancy temporarily different than a new level of stabilized vacancy

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22
Q

market vacancy

A

actual vacancy for a property type

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23
Q

frictional vacancy

A

the typical minimum vacancy needed for the market to function

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24
Q

GBA

A

gross building area measured from the outside of the exterior walls (condos interior walls)

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25
Q

GLA Gross Living Area

A

gross living area - finished and heated space above grade for single & multi unit residential- exterior dimentions (condos interior).

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26
Q

GLA Gross Leasable Area

A

shopping centers - exterior walls, half of demising walls

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27
Q

NRA Net Rentable Area

A

space on which tenants pay rent - gross building area less vertical floor penetrations (includes common areas)

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28
Q

Io (1)

A

NOI

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29
Q

Ro (2)

A

going in cap rate, initial cap rate

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30
Q

Vo (2)

A

PV, value of overall property

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31
Q

Ie (4)

A

Income to equity, pre tax cash flow, equity dividend, cash on cash

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32
Q

Re (5)

A

Rate to equity, equity cap rate, equity dividend rate, cash on cash rate, cash flow rate

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33
Q

Ve (1)

A

down payment

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34
Q

Im (3)

A

income to mortgage, annual debt service, annual loan payment

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35
Q

Rm (4)

A

Mortgage constant, rate to mortgage, loan constant, mortgage cap rate, loan amortization factor

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36
Q

Vm (4)

A

value of the mortgage, loan balance, unpaid loan principal, amount borrowed at the beginning of the loan

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37
Q

I t (3)

A

Terminal income, exit income, reversionary income

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38
Q

Rt (3)

A

terminal cap rate, exit rate, going out rate

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39
Q

Vt (5)

A

terminal value, reversion, resale, future value, FV, exit value

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40
Q

3 kinds of change

A

total, compounded, straight line

41
Q

Total change (4)

A

level, stable, fixed, constant

42
Q

Straight line change (2)

A

constant amount, straight line (+50, -10)

43
Q

Compounded change (5)

A

exponential, percentage, constant ratio, compounded, percentage

44
Q

Return of

A

recapture, recovery

45
Q

Yield rate (3)

A

discount rate, return on and IRR

46
Q

Percentage (2)

A

Ratio, proportion

47
Q

Model (2)

A

formula, relationship

48
Q

Holding period (2)

A

ownership period, projection period

49
Q

M

A

LTV loan to value ratio, mortgage ratio

50
Q

Yo

A

return on the whole investment over the holding period

51
Q

Ye

A

return on the equity investment over the holding period

52
Q

Ym

A

percentage return on the mortgage - interest rate when there are no points/costs

53
Q

Four forces that influence value

A

GEES government, enviornmental, economic, social

54
Q

Four factors to create value

A

DUES demand, utility, effective purchasing power, scarcity

55
Q

Four agents of production

A

CELL Capital, Entreprenurial coordination, land and labor

56
Q

Four powers of government

A

PETE Police, Eminent domain, taxation, escheat

57
Q

Escheat

A

right to take title when someone dies w/o a will

58
Q

Four stages of a neighborhood

A

GSDR growth stability, decline revitalization

59
Q

Four test of H & B Use

A

PLFM - physically possible, legally permissible, financially feasible, maximally productive

60
Q

Four components of a market cycle

A

ECRR - expansion, contraction, recession, recovery

61
Q

15 Economic Principles - Anticipation

A

value is created by expected future benefits

62
Q

15 Economic Principles - Change

A

the result of the dynamic interaction of the 4 forces that create value (GEES)

63
Q

15 Economic Principles - Supply & Demand

A

quantity of goods, products & services and the amount desired by consumers

64
Q

15 Economic Principles - Substitution

A

buyer will pay no more than the cost to acquire an equally desireable alternative assuming no undue delay

65
Q

15 Economic Principles - Balance

A

value is maximized when the 4 agents of production (CELL) are brought together in the propert proportions

66
Q

15 Economic Principles - Competition

A

interaction of market participants

67
Q

15 Economic Principles - Contribution

A

the amount a component adds to a larger property or value loss if its missing

68
Q

15 Economic Principles - Conformity

A

value is maximized when the property conforms to the demands of the market

69
Q

15 Economic Principles - Surplus productivity

A

net income remaining after the agents of production have been paid (CELL)

70
Q

15 Economic Principles - Law of Decreasing Returns

A

additional expenditures beyond a certain point will not yield a return commensurate with the additional investment

71
Q

15 Economic Principles - Externalities

A

factors outside a property can have positive or negative effects on value

72
Q

15 Economic Principles - Progression

A

value of an inferior property can be enhanced by better properties nearby

73
Q

15 Economic Principles - Regression

A

value of a superior property can be degraded by inferior properties nearby

74
Q

15 Economic Principles - Opportunity Cost

A

the cost of an option not chosen

75
Q

15 Economic Principles - Consistent Use

A

improvements must be valued in a fashion that is consistent with the highest and best use of the underlying land

76
Q

5 tools used by the Fed to Influence the Economy

A

control money supply, open market policy (buy sell bonds), set the discount rate, set the federal funds rate, setting the reserve requirement (regulationT).

77
Q

Risk

A

the probability a foreseen event will not occur

78
Q

Financial risk

A

the risk associated with debt, risk of foreclosure

79
Q

market risk

A

risk that shifts in supply or demand will degrade value

80
Q

capital market risk

A

risk that the avalaiblity of capital will impair value

81
Q

Value converters

A

cap rates and yield rates increase with more risk, multiplers decrease

82
Q

sensitivity analysis

A

how much one dependent variable changes the answer

83
Q

scenario analysis

A

a study of 3 outcomes that would occur by changing more than one variable - pessimistic, most likely and optomistic

84
Q

Mile (3)

A

5,280 l.f., 320 rods, 80 chains

85
Q

Rod

A

16.5 feet

86
Q

Chain

A

66 feet 0.1 furlong

87
Q

Furlong

A

660 feet

88
Q

Metes & Bounds

A

point of beginning, boundaries, meets back at the end

89
Q

Rectangular Survey System

A

(public land survey system) each block is a 640 acre Township, 6 miles by 6 miles, 36 one square mile blocks

90
Q

Township

A

1 square mile block, 36 square miles, 640 acres

91
Q

Range

A

stacked vertical townships numbered east and west of the principal meridian

92
Q

Principal Meridian

A

lines that run north and south to separate townships

93
Q

Base Lines

A

lines that run east and west to separate townships

94
Q

Lot and block system

A

a subsystem of the rectangular survey system

95
Q

Ownership in severalty

A

sole ownership (person, REIT, corp, partners)

96
Q

Co-ownership

A

ownership held by 2 or more parties or entitites

97
Q

Tenants in common

A

(co-ownership) with undivided fractional interest, passes on death in accordance with will

98
Q

Joint tenants

A

(co-ownership) interest passes to other owner on death of one

99
Q

Tenancy by the Entirety

A

(co-ownership) for married couples with equal undivided interest w/ right of survivorship

Appraisal - General (6 decks)

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