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Real Estate

Property, investment, and the business of real estate.

Appraisal

Appraisal is a critical business topic covering frameworks, analysis, and real-world applications.

Key points: Core principles, practical applications, and advanced concepts that build deep understanding.

Comparative Market Analysis (CMA)

Comparative Market Analysis (CMA) is a critical business topic covering frameworks, analysis, and real-world applications.

Key points: Core frameworks, analytical tools, and real-world case studies with quantitative examples.

Cap Rate

Cap Rate is a critical business topic covering frameworks, analysis, and real-world applications.

Key points: Core principles, practical applications, and advanced concepts that build deep understanding.

LTV (Loan-to-Value)

LTV (Loan-to-Value) is a critical business topic covering frameworks, analysis, and real-world applications.

Key points: Core principles, practical applications, and advanced concepts that build deep understanding.

NOI (Net Operating Income)

NOI (Net Operating Income) is a core technology topic with practical implementations, complexity analysis, and real-world applications.

Key points: Core principles, practical applications, and advanced concepts that build deep understanding.

Core Concepts

Appraisal

The process of estimating the market value of a property.

Comparative Market Analysis (CMA)

Comparing a property to similar recently sold properties to estimate its value.

Cap Rate

Net Operating Income / Property Value. A key metric for real estate investment returns.

LTV (Loan-to-Value)

The ratio of the loan amount to the appraised value of the property. LTV = Loan / Value.

NOI (Net Operating Income)

Gross rental income minus operating expenses (before debt service and taxes).

Worked Examples & Applications

Cap Rate Example: Property value: $1,000,000. Gross income: $150,000. Operating expenses: $50,000. NOI = $100,000. Cap Rate = 100,000 / 1,000,000 = 10%. Higher cap rate = higher risk/return.
LTV Example: Home price: $500,000. Down payment: $100,000. Loan: $400,000. LTV = 400,000 / 500,000 = 80%. Most lenders require ≤80% LTV for best rates.

Practice Questions

Q: How is cap rate calculated? A: Cap Rate = Net Operating Income / Property Value. It measures the rate of return if purchased with cash.
Q: What is NOI? A: Net Operating Income = Gross rental income minus operating expenses, before mortgage payments and taxes.

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