Commercial Real Estate Exam Questions And Answers
What do you refer to as the personal cash you put into a property? - Answer Equity
Should your NOI be greater or lesser than your interest rate? - Answer Greater
Is debt a bad thing? - Answer It depends
What does debt consist of? - Answer Principal and interest
Determine the loan principal based on the following:
Annual interest:8%
Interest expense: 14,000 - Answer 175,000 x .08= 14,000
Calculate the interest rate based on the
Interest expense 18,000
Loan principal 150,000 - Answer 150,000 x .12= 18000
Using the following information calculate the annual interest payment
Loan principal 150000
Annual interest 6% - Answer 150000 x .06= 9,000
What do you call the money from investors who will co-won the building with you? -
Answer Equity
What do you call the original sum of money borrowed from a lender? - Answer Principal
, What is the word that describes the money you borrow from a lender or bank that you
pay back over time plus interest? - Answer Debt
Assuming each building is in the same neighborhood, which one of these properties do
you think has a higher cap rate? - Answer Older building
Let's say there are two identical buildings. One in an unpopular city, and one in a
popular city. Which of these properties could have a higher cap rate? Answer
Unpopular city
Let's say we have two of the same buildings. One building is in a neighborhood with lots
of crime and the other is in a neighborhood with low crime. Which of these properties
might have a higher cap rate? - Answer High crime
If a building has a value of 600,000 and a cap rate of 4% what is the building's NOI? -
Answer 600,000 x .04= 24,000
The total possible rent is 15,000 and the building is 80% occupied. What is the net rent? -
Answer 15,000 x .8= 12,000
Calculate the properties total expenses using the following information
Property taxes 1,100
Maintenance 1,050
Utilities 2,100
Insurance 775
Management fees 2,500 - Answer Add them all together to get 7525
Calculate net operating income (NOI) based on the following information
Total revenue 216,000
What do you refer to as the personal cash you put into a property? - Answer Equity
Should your NOI be greater or lesser than your interest rate? - Answer Greater
Is debt a bad thing? - Answer It depends
What does debt consist of? - Answer Principal and interest
Determine the loan principal based on the following:
Annual interest:8%
Interest expense: 14,000 - Answer 175,000 x .08= 14,000
Calculate the interest rate based on the
Interest expense 18,000
Loan principal 150,000 - Answer 150,000 x .12= 18000
Using the following information calculate the annual interest payment
Loan principal 150000
Annual interest 6% - Answer 150000 x .06= 9,000
What do you call the money from investors who will co-won the building with you? -
Answer Equity
What do you call the original sum of money borrowed from a lender? - Answer Principal
, What is the word that describes the money you borrow from a lender or bank that you
pay back over time plus interest? - Answer Debt
Assuming each building is in the same neighborhood, which one of these properties do
you think has a higher cap rate? - Answer Older building
Let's say there are two identical buildings. One in an unpopular city, and one in a
popular city. Which of these properties could have a higher cap rate? Answer
Unpopular city
Let's say we have two of the same buildings. One building is in a neighborhood with lots
of crime and the other is in a neighborhood with low crime. Which of these properties
might have a higher cap rate? - Answer High crime
If a building has a value of 600,000 and a cap rate of 4% what is the building's NOI? -
Answer 600,000 x .04= 24,000
The total possible rent is 15,000 and the building is 80% occupied. What is the net rent? -
Answer 15,000 x .8= 12,000
Calculate the properties total expenses using the following information
Property taxes 1,100
Maintenance 1,050
Utilities 2,100
Insurance 775
Management fees 2,500 - Answer Add them all together to get 7525
Calculate net operating income (NOI) based on the following information
Total revenue 216,000
