Exam 18: Investment Decisions: Ratios

Given the following information,calculate the effective gross income multiplier for the specific investment.Effective gross income: $49,500,First-year NOI: $18,750,Acquisition price: $520,000,Equity Investment: 20%.

Unlike the debt coverage ratio,the debt yield ratio (DYR)is not affected by the interest rate or amortization period of the loan;the DYR is simply a measure of how large the NOI is relative to the loan amount.Lenders who rely on this ratio are typically willing to accept a minimum DYR of

If the lender has agreed to offer you a loan with a loan-to-value ratio of 85%,what is the size of the loan if the purchase price of the home is $500,000?

The going-in capitalization rate can vary significantly by property quality.Which of the following classes of properties within a particular property type would be expected to have the highest cap rates?

Given the following information,calculate the capitalization rate for the following apartment complex.Number of apartments: 15;Market Rent (per month): $1,000;Vacancy and Collection Loss: 10% of potential gross income;Operating Expenses: 5% of effective gross income;Capital Expenditures: 10% of effective gross income;Acquisition Price: $1,710,000.

Given the following information,calculate the going-in capitalization rate for the specific property.First-year NOI: $18,750,Acquisition price: $150,000,Equity Investment: 20%.

Given the following information,calculate the operating expense ratio for this property.Potential gross income: $120,000,Vacancy rate: 9%,Net operating income: $57,900,Operating expenses: $51,300.

The measure of cash flow most relevant to investors in income-producing real estate is the after-tax cash flow (ATCF)from property operations.Therefore,it is important to know that the maximum federal income tax rate on individuals as of 2012 is: