Tutor profile: Adam S.
Subject: Real Estate
A commercial property currently produces $1,000,000 in Net Operating Income and presently needs $200,000 worth of capital improvements. As the owner, your due diligence is telling you that similar properties are selling at capitalization rates of 6.25%. If total selling costs are 2.0%, what can you reasonably assume your net proceeds to be?
The direct cap method would value the center at $16,000,000 ($1,000,000 / .0625). If the buyer is to incur the cost to repair the property to a reasonable standard, the owner should further discount the pricing by $200,000 resulting in a sale price of $15,800,000. Since the cost of sale at 2.0% for broker/legal fees is at the burden of the owner, $316,000 should be further deduced ($15,800,000 x .02) leaving net proceeds to the owner of $15,484,000
Subject: Microsoft Excel
What would be the correct formula to determine a monthly mortgage payment (reflected as a positive value) based on a loan of $100,000 with 4.0% annual interest and amortized over 30 years?
Subject: Personal Finance
If your gross salary is $100,000 and you have personal expenses of $4,000 per month with a savings goal of $10,000 per year, how much free cash do you have between bi-weekly pay-periods based on 26 pay periods per year?
This is a bit tricky question! The first hurdle is to understand your bi-weekly 'net' pay based withholdings for taxes, insurance, and any employer-sponsored retirement plans. If your net pay after these withholdings is approximately $2,423 (filing single) per pay period, then we know your annualized net take-home pay is $63,000. If monthly expenses are $4,000 ($48,000 annually), with a savings goal of $10,000 (or $385 per pay period), this leaves a balance of $5,000 free cash per year. Dividing $5,000 by 26 (number of pay periods per year) leaves approximately $192.31 of free spending money between pay periods while meeting both monthly expense obligations and your savings goal of $10,000/year!
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