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Real Estate Finance & Investment Skill Assessment

Real Estate Finance & Investment Skill Assessment

Get ready. Your life is about to change. 😉
15Questions
  • 1
    A property is selling for $2,950,000 that has a Scheduled Gross Income of $373,000.  The current vacancy is 11%, and the expenses total $178,913. What is the cap rate?
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  • 2
    An investor secured a $3,875,000 loan at 5.2% with monthly payments amortized over 30 years. Five years later, they want to sell the property and pay off the loan in full. The lender’s prepayment penalty is 3%. What is the payoff amount?
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  • 3
    An investor acquired a 42-unit property for $6 million at a 6.0% cap rate. During the holding period, they increased the SGI by an average of $128 per unit per month. Vacancy averages 3%. Management fees are 6% and all other operating expenses remain unchanged. How much appreciation did the investor create if they sold the property at a 5.75% cap rate?
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  • 4
    The price of a property is $3,750,000. The LTV is 70%, the interest rate is 7.75%, the amortization schedule is 30 years, and the loan term is 10 years. What is the balloon payment?
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  • 5
    An investor bought an apartment complex five years ago for $5.25 million at a 6.5% cap rate. They secured a 75% loan at 4.5% interest amortized over 30 years. Today, the property is operating at a 9.0% cap rate based on the acquisition price, and they are considering selling the property. What is the investor’s current return on equity?
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  • 6
    A commercial property has a Gross Rent Multiple of 12.2. The contract price is $2,837,720. Expenses are 35% of Scheduled Gross Income and vacancy is 3%.  The debt service coverage ratio on the loan is 1.15, amortized over 30 yrs, and the interest rate is 5.5%. What is the maximum loan amount on this property?
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  • 7
    The price of a property is $1,200,000. The NOI is $90,000 and the seller will carry a note at 5% interest-only. After how many years will the buyer have doubled his equity from principal paydown?
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  • 8
    An investor buys a property for $4.35 million at a 6.0% cap rate. They are able to secure a loan with a debt service coverage ratio of 1.25 and an interest rate of 4.75% amortized over 30 years. What is the investor’s cash-on-cash return in the first year?
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  • 9
    The NOI of a property is $245,000. The cap rate is 7%. The LTV is 80%. The interest rate is 6.75%. The loan term is 7 years and the amortization is 30 years. What will be the balloon payment at maturity?
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  • 10
    An investor is buying a property for $7,000,000 at a 7.5% CAP. The debt service coverage ratio is 1.3, the term is 25 years, and the interest rate is 5.875%.  What is the investor’s maximum loan amount?
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  • 11
    A buyer on a property wants a cash-on-cash return of 8% on in-place income on day 1.  The loan obtainable is for $3,825,000 at 6.25% and a 25 year term. The property’s NOI is $502,788.  What is the most the buyer can pay?
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  • 12
    An investor secures a 75% LTV loan on an investment property for sale at $4,750,000. The interest rate is 5.5%, the loan is amortized over 25 years, and the loan term is 7 years. The lender charges 2 discount points and $8500 in fees at origination. Four years later, the investor sells the property and pays off the loan with a 2% prepayment penalty. What was the investor’s actual annual cost of capital on the loan?
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  • 13
    A buyer is preparing to write an offer on a property for $4,500,000 and wants to put down only 20%. The best available conventional loan provides for a 70% LTV at 7.5% interest with a 25-year amortization. The buyer asks that the seller carry an interest-only 2nd trust deed for the difference. What is the maximum the interest rate could be on the 2nd to get the buyer’s total monthly payment to $26,650?
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  • 14
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  • 15
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  • 16
    Please indicate a correct E-mail address. Your score and the correct answers will be sent to this address.
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