Real Estate QUIZMASTER

Real Estate QUIZMASTER Definitions Potpourri Miscellaneous Numerical ARMs 100 100 100 100 100 200 200 200 200 200 300 300 300 300 300 400 400 400 400 400 500 500 500 500 500 “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Definitions for 100 • The rate that a bank charges its most creditworthy customers “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Definitions for 200 • A stream of equal • payments occurring at • regular intervals of time “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Definitions for 300 • The term for the type of mortgage where the regular monthly payments completely and exactly pay off all the principal in over the course of the loan “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Definitions for 400 • The ratio of the present value of the annuity to the amount of each payment “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Definitions for 500 • The payment per dollar of loan (including both interest and principal amortization) “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Potpourri for 100 • Government Securities can be used as a proxy for ______ investments “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Potpourri for 200 • The future value of $20,000 which grows at an annual interest rate of 12% per year for two years “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Potpourri for 300 • The amount of the loan supportable by a commercial property with NOI of $50,000, debt coverage ratio requirement of 1.25 and current rates at 9.0% for 25 years, with monthly payments, ignoring loan to value constraints is _____ “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Potpourri for 400 • A lender makes a $30,000 loan at 9.0% for 31 years with monthly payments of $239.89. To bring the APR up to 9.5% _____ points must be charged, assuming no prepayment “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

DAILY DOUBLE “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Daily Double Potpourri for 500 This “Rule” relates to the amount of time or the interest rate required for a present value to double itsvalue “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Miscellaneous for 100 • M M C “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Miscellaneous for 200 • P L A M S “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Miscellaneous for 300 • Generally if mortgage interest rates drop by more than ____ basis points, refinancing will save the borrower money “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Miscellaneous for 400 • R A M “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Miscellaneous for 500 • L I B O R “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Numerical for 100 If we were indifferent between receiving $3,500,000 today and receiving $4,000,000 after one year, our opportunity cost of capital would be ______ “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Numerical for 200 The effective cost of borrowing on a $1,000,000 loan with 2 points, 10% amortizing over 25 years, and prepayment expected in 15 years with no prepayment penalty is ___ “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Numerical for 300 • The supportable loan for a REIT with 8% interest, 25 year amortization and DCR of 2, with an available cash flow of $50,000,000 is approximately ____ “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Numerical for 400 • A simple interest rate of 1.725% per month gives an EAR of _____ “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

OSLB after 10 years on a $1,000,000 loan at 10%, 25 year mortgage will be _____ Numerical for 500 “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

ARMs for 100 • Typical Life Caps on ARMs run _______ over the course of the loan “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

ARMs for 200 In an ARM rate calculation: Contract – ?????? = Index “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

ARMs for 300 • The most common caps in ARMs are _____ and Lifetime “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

ARMs for 400 • The first year rate of an ARM is often less than the longer term expected rate and is called a ____________ rate “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

ARMs for 500 • ______ borrowers with few liquidity concerns will often opt for ARMs “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Real Estate QUIZMASTER