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##### Real Estate Practice : Lesson 2893
By David Saks, Broker / Industry Analyst
#1893 If a buyer purchased an apartment building for \$400,000 and the total amount of the rents received amounted to \$60,000 annually, and his annual expenses were \$20,000, what is the rate of return his investment will pay ? Take your time. The solution is posted below the wildlife photo. A. 10% 60000 annual rentminus20000 expenses=40000divided by400,000 cost of the building=0.10 or 10%
##### Real Estate Practice : Lesson 2892
By David Saks, Broker / Industry Analyst
#2892 What would be the annual rate of interest on a \$42,000 loan if the quarterly interest payments are \$577.50 per quarter ? Take your time. The solution is posted below the wildlife photo.   A. 5.5% 577.5 quarterly interesttimes4 quarters=2310 total interest per yeardivided by42000 loan amount=0.055 interst rate or 5.5% interest rate
##### Real Estate Practice : Lesson 2891
By David Saks, Broker / Industry Analyst
#2891 An owner owns a building that gives him a gross income of \$3,250 per month.His average monthly expenses are \$1550 per month.Would would be the owners net income per year on the property considering these variables ? Please take your time. The solution is posted below the wildlife photo.   A. \$20,400 3250 per month-1550 expenses=1700 net per month*12 months=20400 net income per year.
##### Real Estate Practice : Lesson 2890
By David Saks, Broker / Industry Analyst
#2890 A lot 65 feet wide and 150 feet deep sold for \$76,700. What was the price of the lot per front foot ? Take your time. The solution is below the wildlife photo. A. \$1180 per front foot This is really pretty simple and shouldn't consume too much of your time. And you won't have to stretch your neck out too far on this one either. :-)Divide \$76,700 by 65 feet.\$1180 per front foot.
##### Real Estate Practice : Lesson 2889
By David Saks, Broker / Industry Analyst
#2889 The commission rate has been established for selling an apartment house and was set at five percent of the first 15 thousand dollars, and three percent of the next 20 thousand dollars. The commission rate on the balance was 1.5 percent.The broker received a commission payment of \$1,710.What was the selling price of the property ?Remember to take your time. The solution is posted below the wldlife photograph. A.\$59,000 150000 first commission level*0.05 percentage of first level=7500 total commisssion of first level 200000 second commission level* 0.03 percentage of second level=6000 total commission of second level 17,100 total commission paid-13,500 subtract first and second level commission base from the total and find a commission balance of 360 dollars.=3600 commission balan...
##### Real Estate Practice : Lesson 2888
By David Saks, Broker / Industry Analyst
#2888 A broker sold a lot 125 feet wide by 160 feet deep for \$1.70 per square foot.The buyer paved the lot at a cost of \$22.50 per front foot.What is the total amount that the buyer would have to ask for the property if he wants to make a profit of \$2950 ?Please take your time. The solution is posted below the wildlife photo. A. \$39,762.50Let's find out what the buyer paid for the lot by multiplying 125 times 160 to see that the total square footage of the lot was 20,000 square feet.Multiply the \$1.70, the cost per square foot, times the total square feet to see that the buyer paid \$34,000 for the lot.If the paving cost is 22.50 per front foot multiply 22.50 times 125 to see that the buyer paid 2812.50 to pave the lot.If he wants to make a 2950 dollar profit add \$34,000 plus \$2812.50 p...
##### Real Estate Practice : Lesson 2887
By David Saks, Broker / Industry Analyst
#2887 An apartment building has a gross income of \$11,340 per month and annual expenses of \$25,000.What is the proce a buyer would pay for the building to receive a net return of 8% on his investment ?Please take your time. The solution is posted below the wildlife photo. A. \$1,388,500 First multiply the monthly income of 11,340 times twelve months to get the annual income from the building of \$136,080.Subtract the annual expenses of 25 thousand dollars from the annual income of \$136,800 and we see that the owner nets \$111,080 after expenses.Now, divide the rate of net return on the investment of 8% or .08 into the net income of \$111,080 to see that the buyer would have paid \$1,388,500 to receive 8% return on the investment.
##### Real Estate Practice : Lesson 2886
By David Saks, Broker / Industry Analyst
#2886 What would be the depth of a rectangular lot containing 1080 square yards with a frontage of 90 feet ?Take your time. The answer is posted below the wildlife photo. A. 108 square yards First find out how many square yards equal 90 feet by dividing 9 (the total number of square feet in one square yard) into ninety to find ten square yards.Now divide 10 square yards of frontage into 1080 square yards to find the total depth of 108 square yards.
##### Real Estate Practice : Lesson 2885
By David Saks, Broker / Industry Analyst
#2885 A seller wants to trade his residence at a price of \$157,500 subject to a mortgage with a balance of \$62,400 for a multi-family housing unit with a price of \$623,500 with a mortgage of \$366,750.What's the amount of the total cash difference ?Remember to take your time. The solution is posted below the wildlife photo. A. \$161,650 Let's subtract the mortgage balances from the price of each property.Subtract the \$62,400 mortgage balnce from the first proerties sale price of \$157,500 to find 95,100 dollars (which could be considered equity if we're considering value).Now let's subtract the  mortgage balance from the selling price of the property the seller wants to trade for by subtracting the mortgage balance of \$366,750 from the selling price of \$623,500 to find a cash difference of...
##### Real Estate Practice : Lesson 2884
By David Saks, Broker / Industry Analyst
#2884 The selling price of a home was \$930,000.The broker agreed to a commission of 5%.Other charges applied from escrow amounted to \$9500.How much money did the seller receive at closing ? Remember to take your time. The solution is posted below the wildlife photo. A. \$874,000Let's find out what the seller paid the broker by multoplying the commission rate of 5% times the selling price of the house, or \$930,000 times .05, and we see that the total commission due the broker is 46,500. Subtract 46,500 from the selling price and we have 883,500 net the seller after commission.Now subtract the money paid out of the escrow, \$9500, from the net after commission, 883,500, and we see that seller receives \$874,000 at the closing.
##### Real Estate Practice : Lesson 2883
By David Saks, Broker / Industry Analyst
#2883 If the interest rate is 4.5% and the monthly interest payment is \$212.50, what is the principal sum due ? Please take your time. The solution is posted below the wildlife photo. A.\$56,666.66 Easy !Multiply \$212.50 times twelve months to get \$2550 total interest payment and divide \$2550 by 4.5% or .045 to get the total principal balance of \$56,666.66.
##### Real Estate Practice : Lesson 2882
By David Saks, Broker / Industry Analyst
#2882 A man bought two 60 foot lots for thirty thousand dollars each and decided to divide them into three lots consisting of equal frontage. He sold each lot for \$24,000.What the percentage of his gross profit ? Please take your time. The soluton is posted below the wildlife photo. A. 20% gross profit If he paid thirty thousand dollars for two lots, then he paid sixty thousand dollars for both of the lots.If he sold three lots for 24,000, the gross income from the sale was 72,000 and the net was 12 thousand over the original purchase price.Divide the original purcahse price of 60 thousand dollars into the gross profit of twelve thousand dollars and we see that the percentage of the gross profit is .20 or 20%.
##### Real Estate Practice : Lesson 2881
By David Saks, Broker / Industry Analyst
#2881 What is the interest on \$80,000 at 4.5 % per annum for nine months and fifteen days using a bankers calendar (360 days)? Please take your time. The solution is posted below the wildlife photo. A. \$2850 Let's multiply the interest rate times the loan amount, 80,000 times 4.5% (.045) and we see that the annual interest on the loan is \$3600. Since we're using a bankers year, 360 days, divide 3600 by 360 to see that the interest is 10 dollars a day.Each month in a bankers calendar is 30 days, so multiply 30 time 9 to get 270, and add the extra 15 days to gat the total number of days in which interest is to be applied, 285, and multiply that number times 10 dollars a day.10 times 285 equals \$2850 interest.
##### Real Estate Practice : Lesson 2880
By David Saks, Broker / Industry Analyst
#2880 If a home is assessed at 80% of it's value and it's value is \$800,000, and the combined tax rate is equal to \$42.50 per 1000 dollars of valuation, what is the total annual tax amount ? Remember to take your time. The solution is posted below the wildlife photograph. A. \$27,200 Let's find out what the assessed value of the home is by multiplying the assessed value rate of 80% or .8 times the value of the home, \$800,000, and we see that the assessed value of the home is \$640,000.Now, let's multiply 640 (640 thousand dollar increments) times the  tax rate of \$42.50 per thousand dollars to see that the total annual tax is \$27,200.
##### Real Estate Practice : Lesson 2879
By David Saks, Broker / Industry Analyst
#2879 A lot measuring 100 feet by 108.9 feet would be would be equivalent to what portion of an acre ? Please take your time. The solution is posted below the wildlife photo. A. One quarter of an acre. Let's multiply 100 feet times 108.9 to find the total square footage of the lot, which is 10,890 square feet.We know that an acre contains 43,560 square feet, so divide 10,890 into 43,560 and we see that 10,890 will divide 43,560 4 times.One fourth, 10,890 of 43,560 square feet, is one quarter of an acre or .25 or 25% of an acre.
##### Real Estate Practice : Lesson 2878
By David Saks, Broker / Industry Analyst
#2878 A commercial lot is assesed at 60 thousand dollars. The tax rate has been established to reflect \$15.55 per \$1000 of assessed valuation. What is the amount of the property tax ? Take your time. The answer is posted below the wildlife photograph. A. \$933 If the property's assessed value is 60 thousand dollars, multiply 60 (each thousand dollar increment per \$1000 of assessed valuation) times \$15.55 for a total of \$933.
##### Real Estate Practice : Lesson 2877
By David Saks, Broker / Industry Analyst
#2877 A broker has 1.87 acres of land listed with himlisted with him for sale at 22.50 per square foot. What was the total selling price of the acreage ? Take your time. The answer is posted below the wildlife photo ? A. \$1,832,787 We know that there are 43,560 square feet in an acre of land, so multiply 43,560 times the total acreage of 1.87 to find that there is a total of 81,457.2 square feet. Multiply 81,457.2 times 22.50 per square foot to find the selling price of \$1,832,787