Two-Day Advanced Income Capitalization/A

• Appraisal Institute Designated members who hold one or more of the following designations: MAI, SRPA, AI-GRS
• Certified general real property appraisers

Advanced topics are divided into four general areas:

• Operating income issues, including complex lease structures, reimbursements, and tenant improvement allowances
• Property valuation techniques, property taxes that are a function of market value, reversions, property model applications, and supporting the discount rate    
• Complex mortgage instruments
• Case study applications of an office building

Note. Candidates for Designation may NOT take this course for designation credit.

• Recall and apply basic income capitalization formulas.
• Calculate percentage rent and index rent.
• Calculate reimbursements and resulting effective gross income.
• Recognize eight methods for calculating replacement allowances.
• Apply the method where the replacement allowance is implicit in the capitalization rate.
• Identify methods of treating below-the-line expenses in direct capitalization and discounted cash flow analysis.
• Describe and calculate three methods for computing effective rent.
• Define and explain level equivalency constant ratio equivalency.
• Calculate current property taxes.
• Calculate projected property taxes and market value using an effective tax rate and loaded capitalization rate.
• Apply the property model to three different premises (level, declining, and rising).
• Apply the property model to support the discount rate.
• Calculate gross building area, rentable area, and usable area in an office building.
• Forecast income and expenses over time.
• Calculate payment, loan balance, and term for fixed-rate amortizing mortgages.
• Recognize and calculate debt-coverage ratio and loan-to-value ratio.
• Value a mortgage under changing market interest rates.
• Solve for the lender’s yield (Y_M) with points and other origination fees, as well as with prepayment that includes a penalty.
• Calculate dollar amounts and yield rates associated with the various positions in wraparound mortgages.
• Calculate debt service, mortgage balance, and debt coverage ratio.
• Calculate cash flows and lender’s yield for a participating mortgage.
  
  

• MAI Designation OR
• General Appraiser Income Approach/Part 1 AND General Appraiser Income Approach/Part 2