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====== Important Real Estate Formulas to Memorize (CA Exam) ======

===== Valuation & Appraisal =====
  * **Market Value (Income Approach)**
    * Value = NOI ÷ Cap Rate
    * Cap Rate = NOI ÷ Value

  * **Gross Rent Multiplier (GRM)**
    * GRM = Sales Price ÷ Gross Rent
    * Value = Gross Rent × GRM

  * **Gross Income Multiplier (GIM)**
    * GIM = Sales Price ÷ Gross Income
    * Value = Gross Income × GIM

  * **Cost Approach**
    * Value = Land Value + Replacement Cost − Depreciation

===== Financing =====
  * **Loan Amount**
    * Loan = Purchase Price − Down Payment

  * **Down Payment**
    * Down Payment = Purchase Price × Down Payment %

  * **Loan-to-Value (LTV)**
    * LTV = Loan Amount ÷ Property Value

  * **Equity**
    * Equity = Market Value (or Sales Price) − Loan Balance

===== Income & Investment =====
  * **Net Operating Income (NOI)**
    * NOI = Gross Income − Operating Expenses

  * **Cash Flow**
    * Cash Flow = NOI − Debt Service

  * **Rate of Return (basic)**
    * Rate of Return = Annual Income ÷ Investment

===== Amortization =====
  * **Monthly Interest**
    * Interest = Loan Balance × Periodic Interest Rate

  * **Principal Payment**
    * Principal = Monthly Payment − Interest

  * **New Loan Balance**
    * New Balance = Old Balance − Principal Paid

===== Brokerage & Commissions =====
  * **Commission**
    * Commission = Sales Price × Commission Rate

  * **Broker Gross Income**
    * Gross Income = Total Commissions Earned (before expenses)

===== Exam Tip =====
  * If it says **no payments made** → loan balance is unchanged
  * If it says **gross** → ignore expenses
  * If it says **net** → subtract operating expenses
  * Cap rate problems always revolve around **NOI**