Residential
What is the average home value in the U.S. as of today (within 50k)?
About $350,000
Do real estate values historically appreciate or depreciate annually?
Appreciate
What is CRE
Commercial Real Estate
Name three factors that help determine rental rates
location, amenities, utilities, etc.
What residential mortgage rate can you expect to receive today (within 1%)
About 6.5%
Provide three reasons why investing in real estate is usually a good investment.
Open to multiple responses
What is a REIT and what does it do?
Real estate investment trust, allows individuals to invest in large scale income producing real estate
Provide three examples of things you may find in a Lease
rent, utilities, term of tenancy, security deposit fees, etc.
What is a foreclosure?
legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan
What does it mean to refinance an investment?
Replace the mortgage you have with a new mortgage that has more favorable terms
What does NOI mean and how is it calculated?
Net operating income is a metric that calculates profitability of an investment, its calculated by subtracting operating expenses from the revenue of a property
What is considered the largest asset class in the world?
Real estate
What is an HOA and how does this affect your purchasing decision?
Home owners association (HOA)– it makes owning a home more expensive in certain areas as it adds a monthly or quarterly fee to your expenses
What is a CAP rate and how do you calculate it?
a metric used to determine your investments expected rate of return, calculated by dividing NOI by purchase price
What is an IRR and why is it important?
internal rate of return, its one of the most commonly used and important metrics in the real estate industry
What is the measure of how much space in your building is rented?
occupancy
List two of the fiduciary duties of a real estate agent
obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care
Name three things included in “Operating Expenses”
property management fees, insurance, property taxes, repairs, and maintenance
What is the cost of financing?
The costs incurred while borrowing funds (interest rate)
Money made available to a tenant to build out their space that has a limit they cannot exceed
tenant improvement allowance