The six formulas
| Problem type | Formula | Drill |
|---|---|---|
| Commission | price x rate, then each split in order | |
| Proration | annual / 365 or 360 x days | |
| Cap rate | NOI / value | |
| LTV | loan / lesser of price or appraisal | |
| Property tax | (assessed value - exemptions) x rate | |
| Area | sq ft / 43,560 = acres |
Math drills
Area and acreage on the real estate examArea problems convert feet to square feet to acres (43,560 sq ft each) and read rectangular-survey descriptions (a...Cap rate and NOI on the real estate examCap rate = net operating income / value. The trap is what goes into NOI: vacancy and operating expenses do, mortgage...Commission and splits on the real estate examCommission = sale price x rate, then split between brokerages, then between broker and agent. Most misses come from...Loan-to-value and down payment on the real estate examLTV = loan / property value, where lenders use the lower of the price or the appraisal. The down payment is price...Property tax and mill rates on the real estate examProperty tax = assessed value x tax rate. A mill is one-tenth of a cent: $1 per $1,000 of assessed value. Apply...Prorations (360 vs 365) on the real estate examProration splits an annual or monthly expense by days owned. Know which day count the question uses and who owns the...
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