REAL ESTATE CHEAT SHEET

ACRONYMS

M.A.R.I.A

Method
Adaptability
Relationship
Intent
Agreement

S.T.U.D

OLDCAR
Obedience, Loyalty, Diligence, Care,

A COLD

Ginny Mae
Freddy Mac
Fanny Mae

TRID
TRILA
PITI
FHA

VA

Race
Color
Religion
Sex
Handicap
Familial Status
National Origin

MATH ACRONYMS

“Four old ladies going thirty five in a sixty”

43,560 Sqft in an acre

ESTATES

FAIR HOUSING

TYPES OF AGENCY

TYPES OF LISTINGS

MATH CONCEPTS

FORMULAS

Cap Rate = Annual net operating income ÷ Cost/Value Price of property

Rate of return = Income/Yield/Profit ÷ Amount Invested

Interest Rate = Annual Interest ÷ Amount loaned
T Formula

Percentages

Example:
Solution:
Answer:

100%
Plus(the % amount)
And then divide if you are looking for a smaller number or;
multiply if you are looking for a bigger number.

Commissions

Commmission

Example:

Anthony just got his first deal closed as he represented the buyer. He joined a
real estate firm that agreed to a 65/35 split. His take being 65%. The house sold
for $750,000 with their firm getting half of the 6% total commission. What was the
commission he brought home on his first deal?

Solution:

$750,000 x 6% = $45,000
$45,000 ÷ 2 = $22,500
$22,500 x 65% = $14,625

Answer:

$14,625

Reverse Commission

Example:

A sales person was to receive a 40% share of a 3% gross commission. The sales
person received $4,200. What did the property sell for?

Solution:

$4,200 ÷ 40% = $10,500

$10,500 ÷ 3% = $350,000

Answer:

$350,000

Commission Problem #2

Example:

Mrs. Lang listed her home with Broker Jack for $400,000. Broker Jack was to receive
5% commission rate. Broker Jack brought in an offer of 10% less than the listed
price. Mrs. Lang only agreed to accept the offer if Broker Jack reduced his
commission by 20% What would Broker Jack’s Commission be if he agreed?

Solution:

Step 1 Find amount offered.

$400,000 x 10% = $40,000

$400,000 - $40,000 = $360,000
$360,000 is the amount offered.

Step 2 find the new commission rate.

5 x 20% = 1
5 - 1 = 4
4% is the new commission rate.

$360,000 x 4% = $14,440

Answer:

$14,440

Cap Rates

Appraisal Problem

Example:

A property in Hawaii was valued at $400,000 using a 6% capitalization rate. Mr.King

wanted to use an 8% capitalization rate, how much should he pay for the property?

Solution:

$400,000 x 6% = $24,000
$24,000 ÷ 8% = $300,000

Answer:

$300,000

Proration

Example:

Lisa buys a property and closes on August 1. The seller pre-paid the annual real
estate taxes of $5,000 in advance. How much will Lisa owe the seller in real estate
taxes at closing?

Solution :

Calculate Monthly Tax

$5,000 ÷ 12 = $416.67
August - December = 5 days

$416.67 x 5 = $2,083.33

Answer:

$2,083.33

Investment Problem #2

Example:

Mr. Good bought two lots for $65,000 each and divided them into three lots. He
later sold each lot for $55,000. What was the percentage of his profit or rate of
return?

Solution:

$65,000 x 2 lots = $130,000

$55,000 x 3 lots = $165,000
$165,000 - $130,000 = $35,000
$35,000 ÷ $130,000 = 26.9 round to nearest 10th 27%

“What he made over what he paid” - Ron Climer

Answer:

27%

Appraisal Problem #5

Example:

Mr. Smith brings in $87,000 Annually from his apartment complex. If he values his
property at $1,087,500. What would his capitalization rate be?

Solution:

$87,000 Annual Income ÷ $1,087,500 Value of the property = Cap rate 0.08 or 8%

Answer: 8%

Appraisal Problem #3
Example:

Mr. Trudell made $67,500 from a one unit apartment by the beach during a 5 year
period. Using a capitalization rate of 7.5%, what was the value of his property?

Solution:

$67,500 ÷ 5 = $13,500
$13,500 ÷ 7.5% = $180,000
Answer:

$180,000

Finance Problem

Example:

Mr. Smith has a 90-day personal note in order to borrow $9,000, on which he paid a
total interest of $325. What was the annual interest rate on Mr. Smith’s note?

Solution:

$325 x 4 Quarters = $1,300

$1,300 ÷ 9,000 = 0.14444
14%

Answer: 14%

Appraisal #4 - Cap Rates

Example:

With a property having an annual net income of $60,000. What is the difference
between a capitalization rate at 5% and at 6%?

Solution:

$60,000 ÷ 5% = $1,200,000
$60,000 ÷ 6% = $1,000,000
$1,200,000 - $1,000,000 = $200,000

Answer:

$200,000

Investment Problem #6

Example:

Solution:

Answer:

Amortization
Excise Tax

LOT AND BLOCK

Geographic Survey SYSTEM METHODS

Parts of a house
i.e. sills, walls, studs

January
February
March
April
May
June
July
August
September
October
November
December

360 days

30 calendar days

Formulas & Measurements:

1 square foot = 12”x12”x12” (or 144 square inches)
1 cubic foot = 12”x”12”x12” (or 1,728 cubic inches or 1 cubic foot)
1 yard = 3 feet (36 inches)
1 square yard = 9 Square Feet (3’x3’)
1 cubic yard = 27 Cubic Feed (3’x’3’x3’)
1 Acre = 43,560 Square Feet (you must remember this)

There are 36 square miles in a Township

1 Square Mile = 640 Acres (Government Survey Method) (each section)
Each section can be divided. 640 ÷ denominator(s)
Area of a Square or Rectangle = width x depth
Area of a Triangle = 1/2 base x height
Property Tax = Assessed Value x Tax Rate
Excise Tax = Sold Price ÷ 500 rounded to the next whole dollar
Commission = Sold Price x% commission
Capitalization Rate of Return
Cap Rate = NOI ÷ Value
Value = NOI ÷ Cap Rate
NOI = Value x Cap Rate

Depreciation of Building = Value ÷ useful life

Value = Depreciation x effective age

Triangle method
Part on top
Whole to the left
and rate to the right