Term
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Definition
| Value is produced based on income stream it is expected to produce. |
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Term
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Definition
V=Value (market value)
I=Net Operating Income (NOI)
R=Cap Rate |
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Term
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Definition
| This method is straight line, stabilized income to perpetuity |
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Term
| Potential Gross Income (PGI) |
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Definition
| Annual rental income assuming 100% occupation and no collection losses. |
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Term
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Definition
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Term
| Effective Gross income (EGI) |
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Definition
| Subtracting vacancy and adding miscellaneous |
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Term
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Definition
| Parking, Laundry, Trash removal |
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Term
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Definition
Fixed: Mortgage, Taxes
Variable: |
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Term
| Net Operating Income (NOI) |
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Definition
| Calculated by deducting from the rental income all expenses associated with operating and maintaining the property. But** before mortgage and income taxes |
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Term
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Definition
| Process of converting periodic income into a value estimate |
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Term
| Capital Expenditure (Capx) |
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Definition
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Term
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Definition
V= NOI/R
*NOI divided by Cap Rate* |
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Term
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Definition
Determine cap rate through recently completed transactions of similar properties.
R= NOI/ Sales Price
5 Comps... Find Avg cap rate |
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Term
| Effective Gross income multiplier (EGIM) |
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Definition
Ratio of property selling price to its Effective gross income (EGI)
Sale Price/ EGI =
**For smaller income producing properties** |
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Term
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Definition
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Term
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Definition
| Borrowers personal Promise to repay |
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Term
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Definition
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Term
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Definition
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Term
| Two documents in every Mortgage |
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
| Lender has right to rely on property as security for debt in event of default |
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Term
| Property description section |
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Definition
| Property must be described definitely. |
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Term
| 3 methods of property description |
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Definition
Metes and bounds
Rectangular survey
Plat lot and block |
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Term
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Definition
| Requires borrower to maintain property insurance |
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Term
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Definition
| Purpose of paying expected obligations such as property taxes, insurance premium |
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Term
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Definition
| In the event of a default lender can declare entire loan due and payable |
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Term
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Definition
| Full loan amount is due at sale |
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Term
| Deed in lieu of foreclosure |
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Definition
| Borrower conveys property back to Lender |
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Term
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Definition
| Stop foreclosure proceeding by producing balance |
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Term
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Definition
| Property taxes,earlier mortgages come before private liens |
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Term
| Judicial Vs Power of sale |
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Definition
| Cour administered sale Vs. Administered by Lender |
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Term
| Truth in Lending act (TILA) |
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Definition
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Term
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Definition
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Term
| HMD act & community reinvestment act of 1977 |
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Definition
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Term
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Definition
| Avoiding certain neighborhoods |
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Term
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Definition
| Lending to those that did not qualify |
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Term
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Definition
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Term
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Definition
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Term
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Definition
| any standard home loan not insured by an gov't agency |
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Term
| PMI- Private mortgage insurance |
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Definition
| Protects lender against default on loan |
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Term
| (FHA) federal housing administration |
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Definition
| Default insurance program |
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Term
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Definition
| Veteran's Affair (self explanatory) |
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Term
| (PMM) Purchase Money Mortgage |
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Definition
| Any mortgage granted for purchase of a property (usually second mortgage) |
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Term
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Definition
| Provide additional funds for purchase of a property in return for collateral |
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Term
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Definition
| A form of second mortgage |
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Term
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Definition
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Term
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Definition
| buyer must pay off loan within 5-7 years |
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Term
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Definition
| begins as fixed rate and turns into traditional ARM |
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Term
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Definition
| Designed to be refinanced |
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Term
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Definition
| Conventional loans with laxed requirements |
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Term
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Definition
| net benefit = benefit of loan payment reduction- cost of financing |
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