Math Formulas Made Easy | Gold Coast Schools, Exams of Elementary Mathematics

Download Math Formulas Made Easy | Gold Coast Schools and more Exams Elementary Mathematics in PDF only on Docsity! Math Formulas Made Easy Ch. 12 Total Obligations Ratio: PITI + All other debts Gross Monthly Income 36% for conventional 43% for FHA 41% for VA Ch. 11 Calculating Commission: Sale Price x Commission % Example: A sales associate sold a property for $200,000 at a 6% commission rate. Assuming the associate is paid a 70% split; how much will the broker retain? $200,000 x 6% x 30% (100-70%) = $3,600 Ch. 12 Housing Expense Ratio: Monthly Housing Expense (PITI)* Gross Monthly Income –28% for conventional –31% for FHA –None for VA *PITI = principal, interest, taxes & insurance Ch. 13 PIP Sandwich: ($$) (Loan) (%) (years) I = P x R x T Interest = Principal X Rate% x 1/12* *either multiply by 1/12 or divide by 12 Ch. 11 Net Listing: A seller wants to net a minimum of 280,000 from the sale of her home. If closing costs are expected to be $4,000 and her broker charges a 6% commission, her home must sell for: $280,000 + $4,000 ÷ 94% (100%-6%) = $302,127.66 Ch. 10 Determining Acreage: How many acres are in a tract identified as the N ½, of the SW ¼, of the N ½? 640 ÷ 2 ÷ 4 ÷ 2 = 40 acres Ch. 12 Discount Points: A buyer paid 2 discount points and received a loan for 7%. What was the lenders effective yield? Ch. 12 Loan to Value Ratio: Shows the loan as a % of value. A buyer purchases a property for $300,000 and makes a $60,000 down payment. What is the loan to value? 300,000-60,000 = 240,000 loan Ch. 14 Paid Mortgage Interest Arrears Taxes Arrears Rent Advance Debit – expense to seller or buyer Credit – money received by seller or buyer 7.0% +1/8 -- 1 point +1/8 – 1 point 7 ⁄𝟐𝟐 𝟖𝟖 or 7.25% APR Loan 240,000 Value 300,000 = 80% Ch. 14 Intangible Tax on MORTGAGE: (NEW LOANS ONLY - Paid by Buyer) .002 x New Loan = $$$ Ch. 14 + Transfer Tax on DEED: (Typically paid by Seller) Sale Price ÷ 100 x .$.70 = $$$ (.60 in Dade County) Ch. 14 Transfer Tax on NOTE: (NEW & ASSUMED paid by Buyer) Loan Amount ÷ 100 x $.35 = $$$ Ch. 16 Sales Comparison Approach: Residential Locate comparable properties; adjust the comparable (never the subject). If comparable is inferior; add, if comparable is better; subtract. Remember: (CBS/CIA) Ch. 14 Calculating Prorations: Closing Date *days used or unused – 30, 365 or 360 days Ch. 16 Cost-Depreciation Approach: 1. Estimate today’s cost to build 2. Estimate accrued depreciation (cost ÷ economic life x age) 3. Subtract #2 from #1. Result = depreciated value of improvements 4. Estimate value of vacant land 5. Add #3 and #4. Result = Property Value Seller* Buyer* 1 Months 2 1 Math Formulas Made Easy Ch. 17 Calculate Payment: Loan amount x Monthly loan constant = Monthly Payment Example: $100,000 x .0087757 = $877.57 Ch. 16 Final Reconciliation: (Weighted Average) Comps $200,000 X 70% = 140,000 Cost-Dep. $210,000 X 20% = 42,000 Income Cap. $180,000 X 10% = 18,000 100% = $200,000 Weighted Average: $200,000 Simple Average: $200,000 + $210,000 + $180,000 ÷ 3 = $196,667 Ch. 16 Gross Multiplier Technique: Reconstructed Operating Statement PGI Potential gross income -V&C Vacancies and collections EGI Effective gross income -OE Operating expenses* NOI Net operating income -ADS Annual debt service BTCF Before tax cash flow (CTO) -INCOME TAXES (BTCF x tax rate) ATCF After tax cash flow Ch. 16 Income Approach: Determining Value Ch. 16 Income Approach: PGI Potential gross income - V&C Vacancies and collections EGI Effective gross income - OE Operating expenses* NOI Net operating income *operating expenses include, fixed, variable and reserves for replacements Ch. 17 Operating Expense Ratio: Operating Expenses Effective Gross Income Provides for comparison with similar properties. Ch. 17 Calculating Profit or Loss Percentage A property was purchased for $125,000 and later sold for $142,000. What was the percentage of profit? Ch. 17.. Straight Line Depreciation for Investment Properties 27.5 years –residential income producing property 39 years – non-residential income producing property Income (NOI) Rate x Value I R x V GRM Sales Price Gross Monthly Rent Multiply the subject property monthly rent by the GRM to estimate value GIM Sales Price Gross Annual Income Multiply the subject property annual income by the GIM to estimate value Ch. 17 Made 17,000* Paid 125,000 *(142,000 – 125,000) *(142,000 – 125,000) = 13.6% When the rate goes up, the value goes down. When the value goes up, the rate goes down. $100,000 10% $100,000 15% Ch. 18 1) Assessed Value x Tax Rate = Tax Liability $25,000 Homestead Exemption 2) Basic Exemption (25,000) x Tax rate = (city/county/school) Total Savings 3) Tax liability (1) minus total savings (2 ) = Property Taxes Calculating Property Taxes $50,000 or Less Ch. 18.. Calculating Property Taxes $50,001 to $75,000 1) Assessed Value x Tax Rate = Tax Liability $25,000 Basic Exemption 2nd Exemption over $50,000 = Savings from 1st 25,000 3) Assessed Value (over $50,000) x Tax Rate 4) Tax liability (1) minus total savings (2&3) = Savings from 2nd 25,000 2) Basic Exemption (25,000) x Tax Rate Calculating Property Taxes $75,001 and Up 1) Assessed Value x Tax Rate = Tax Liability $50,000 Homestead Exemption 3) 2nd Exemption ($25,000) x Tax Rate 4) Tax liability (1) minus total savings (2&3) 2) Basic Exemption (25,000) x Tax Rate = Savings from 1st 25,000 = Savings from 2nd 25,000 = Property Taxes (city/county/school) = Property Taxes (city/county) Ch. 18 (city/county/school) (city/county) Special Assessment Ch. 18 Calculate the cost to a homeowner if the county paid for 30% of a $10 per lineal foot special assessment: =$1,000,000 = $666,667 2