Two-Day Advanced Income Capitalization/B

Some AI educational programs may not be approved in every state.

Students should check state approvals prior to registering for any Appraisal Institute program.

To register for this program, go to the bottom of the page.



Who should enroll
  • Appraisal Institute Designated members who hold one or more of the following designations: MAI, SRPA, AI-GRS
  • Certified general real property appraisers
Description This two-day course reviews topics covered in the second half of the designation-track Advanced Income Capitalization course, but with a greater emphasis on the theoretical aspects of the material. Seasoned appraisers will find advanced topics that have not been covered in previous capitalization courses, along with new graphical ways to present analysis and conclusions. An OPTIONAL exam is included. The course features a limited review of material covered in earlier income courses to maximize the time available for advanced topics.

 

Topics include:

  • Equity valuation
  • Effects of leverage
  • Investor motivations, including measures and types of risk, measures of return, and income tax considerations
  • Case study applications of a subdivision and a proposed development with values that are prospective and subject to hypothetical conditions

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

Objectives
  • Recognize and apply formulas associated with equity valuation using direct capitalization.
  • Apply a component summary grid to an equity residual problem using direct capitalization.
  • Solve for value given equity yield rates and properties with irregular income patterns, terminal capitalization rate-determined reversions, and DCR-determined loan amounts.
  • Solve for equity yield rates given property value and mortgage information.
  • Identify the effects of leverage on expected return and risk.
  • Interpret leverage diagrams to categorize leverage using capitalization rates.
  • Extract property and equity capitalization and yield rates to determine the effect of financial leverage on return to equity.
  • Calculate and relate debt-coverage ratio and loan-to-value ratio to lender risk.
  • Define, distinguish among, calculate, and analyze the usefulness of the payback period, PV, NPV, and IRR for the whole property as measures of investment performance.
  • Distinguish among and apply various risk analysis tools including debt-coverage ratio, loan-to-value ratio, breakeven analysis, sensitivity analysis, scenario analysis, and partitioning the IRR.
  • Calculate capital gains tax.
  • Recognize the formula for the effective tax rate.
  • Estimate value using a line item for entrepreneurial incentive.
  • Calculate the IRR implied if the entrepreneurial incentive line item is deleted.
  • Identify data needed to perform a DCF analysis on a proposed project.
  • Recognize the similarities and differences between prospective values and current values.

Prerequisites


Refer to this page for details of state approval hours for this course.

  • Attended Only:

    150
  • Attended Only:

    150
  • Attended Only:

    150
  • Attend and Pass Exam:

    200
  • Attend and Pass Exam:

    200
  • Attend and Pass Exam:

    200
  • Pass Exam Only:

    55
  • Pass Exam Only:

    55
  • Pass Exam Only:

    55
14 hours
Yes. After you register for this class, please go to your Education and Events page for details on what you must complete BEFORE class begins.
 
To access your Education and Events page, log on to the Appraisal Institute website at https://ai.appraisalinstitute.org/eweb (click on the three horizontal lines to the left of the AI logo and select “My
AI Account” from the drop-down menu).
Yes
1
Advanced
N/A
Classroom Requirements Online Requirements Synchronous Requirements
You will be asked to clear the calculator’s memory before and after the examination. Only one calculator is permitted in the testing room. Examinees taking most AI exams may bring their own calculator to use during the exam. Laptops, cellular phones, tablets, iPads, wearable technology (smart watch, Apple Watch, Google Glass, etc.), and other devices that can store data or connect to the Internet are NOT permitted during the exam. In addition, all watches, wallets, bags, and purses must be removed and stored out of reach prior to taking the exam.


Classroom Offerings

No offerings at this time

Synchronous Offerings

No offerings at this time