FINC 371 Final Exam (New Material) Questions & Answers 100% Correct
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Course
FINC 371
Institution
FINC 371
FINC 371 Final Exam (New Material) Questions & Answers 100% CorrectFINC 371 Final Exam (New Material) Questions & Answers 100% CorrectFINC 371 Final Exam (New Material) Questions & Answers 100% CorrectFINC 371 Final Exam (New Material) Questions & Answers 100% Correct
Types of residential developm...
FINC 371 Final Exam (New Material)
Questions & Answers 100% Correct
Types of residential development: - ANSWER1. single family detached
2. single family attached
3. multifamily
4. manufactured homes
5. second homes
Single family detached houses: - ANSWER- most sought after by American families
- provides more privacy
- "elbow room"
- best resale value
Patio or zero-lot-line houses: - ANSWER- construction is from lot line to lot line
- outdoor living area in an interior garden court enclosed by the house
- smaller yard, but very private
- generally one story and L shaped and may have a side yard
Single family attached houses: - ANSWER- clustering requires less road frontage and
shorter utility lines
- lower development costs per unit
- higher density.. lower land costs
- less ecological impact
- reduced yard work
Types of single family attached homes: - ANSWER- town home: has own door, shares a
wall(s), front and rear yards, face street or common area
- plexes: contains two or more units in one building, shares characteristics of town home and
single family detached
- patio or zero-lot-line houses
,Multifamily residences: - ANSWER- cheaper alternative
- empty nesters, young couples, single person households
- no down payment
- allow you to live in certain areas you couldn't normally afford
- no maintenance/yard work
- tenants can change residences easily
Pros of manufactured homes: - ANSWER- economies of scale and controlled environment in
construction
- affordable ($40 psf vs $90 for site built)
- trend towards owner occupied manufactured home subdivisions (rather than rental parks)
has led to better lending standards with 30 year FHA-insured loans
Repairing and maintaining property: - ANSWER- maximization of market value
- comprehensive maintenance program (be proactive and aids tenant relations)
Maintenance as an investment decision: - ANSWERPV of benefits vs. cost
- qualitative vs. quantitative
Cons of manufactured homes: - ANSWER- reputation
- typically decrease in value over time
- lenders treat as personal property: short term, high interest (10-15 year, 2% higher interest
than conventional loans)
- difficult to get zoning in a city
Second homes: - ANSWER- used for leisure time enjoyment
- access to amenities (mountains, beaches, golf, ski)
- occupied only part of the year
- "time shares"- sold to a number of buyers, each gets exclusive ownership for certain time
period
Steps in market and feasibility analysis: - ANSWER1. delineation of the market area
2. analysis of recent economic trends in the local market area
3. determination of possible changes in demand
4. analysis of potential supply
, Absorption rate: - ANSWERthe number of units that are being absorbed by the market
Delineation of the market area: - ANSWER- describe the housing submarket in which it will
compete
- explain employment opportunities and commuting ranges
- in large city, must determine extent of employment within commuting ranges
- public transportation can expand market area and commuting range
Analysis of recent economic trends in the local market area: - ANSWER- past and current
trends
- vacancy rates, absorption rates, rent vs. own
Determination of future demand: - ANSWER- such as: employment, disposable income,
population, absorption rate, household characteristics
- what changes in economic base or in national/regional/local conditions will affect demand?
- pipeline of new development
- legislation changes
Condominiums and cooperatives: - ANSWER- ownership alternatives
- condo: owner holds title and shares ownership of common areas
- co-op: owner owns stock in co. that holds the title
Manufactured homes (mobile home): - ANSWER- single wide, double wide, triple wide
- assembled on site (24ft-36ft)
- bad reputation in the past, but design has been improved to resemble a conventional
house and improved construction
Analysis of future supply: - ANSWER- long gestation period so must analyze supply during
that period
- examine developments in the pipeline
- determine what lies behind the trends
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