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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%) |