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Real Estate Math
Term | Definition |
---|---|
GRM x monthly | Value |
Appreciation | 100% + x% |
Depreciation | 100% - x% |
Debit | Party owes |
Credit | Party receives |
Origination fees | X% of a loan amount |
Arrears | Begin date to prorate date; debit seller credit buyer |
Borrower w/new loan | Owes interest closing date to end of month |
Lender charges on 30 yr loan | 0.125% interest |
T method | T = total, rate, part; Part/(total x rate) |
Comp/commission/fees | Commission/(sale price x commission rate) |
Sellers | Sellers $ /(sale price x sellers %) |
Gross rent multiplier (GRM) | GRM x monthly rent = value |
Annual property taxes | Annual property taxes / (assessed value x tax rate) |
Points | 1% of loan amount |
Point value | Discount points $ / (loan x discount pts %) |
Borrower w/loan | Seller owes 1st month to prorate, buyer owes prorate to end of month |
Gross income multiplier | GIM x Annual rent = value |
Annual net operating income (ANOI) | Potential Gross income + additional income - vacancy rate = value |
Taxes | Annual net operating income / (value × cap rate) |
Assessed value / (market value x assessment rate) | |
Loan to value (LTV) | Origination fee $ / ( loan x origination x fee%) |