# Real Estate math word problem help

• MHB
• jmathdisinclined
In summary, the conversation discussed a math problem involving determining the per square foot value of a mixed-use undeveloped property with different zoning areas. The formula used was to assign a cost for one acre of commercial land, and then calculate the value of multi-unit and single-unit residential land based on their percentages of commercial land prices. The final answer was found by adding the costs of each type of land for the specified acres. The person receiving help expressed appreciation and mentioned plans to practice and understand the formula better.
jmathdisinclined
I am studying to take a real estate exam. I am having problems determining the correct formula on the percentage problems. I need help solving the answer and understanding the correct formula. Help is much appreciated. The math problem is:
The subject is a mixed use undeveloped property with 3 acres zoned commercial,
5 acres zoned multi-unit, and 2 acres zoned single-unit. A similar 10-acre property
recently sold for $1.80 per sf with 4 acres zoned commercial, 4 acres zoned multiunit, and 2 acres zoned single-unit residential. Based on this one sale property, what is the per square foot value of the subject property if multi-unit land typically sells for 40% of commercial land prices, and single-unit residential land sells for 20% of commercial land prices? Last edited: Let C be the cost of one acre of "commercial land". Since "multi-unit land typically sells for 40% of commercial land prices" one acre of "multi-unit land" cost .4C. Since "single-unit residential land sells for 20% of commercial land prices" one acre of single-unit residential land" cost .2C. "A similar 10-acre property recently sold for 1.80 per sf with 4 acres zoned commercial, 4 acres zoned multi-unit, and 2 acres zoned single-unit residential." There are 43560 square feet per acre so 1.80 per sf is (1.80)(43560)= 78408 per acre. So 4C+ 4(.4C)+ 2(.2C)= 4C+ 1.6C+ .4C= 6C= 78408. C= 78408/6= 13068 . One acre zoned commercial costs 13068, one acre zoned multi-unit cost .4(13068)= 5227.20, and one acre zoned single unit residential costs .2(13068)= 2613.60. The question asks for the cost of 3 acres zoned commercial, 5 acres zoned multi-unit, and 2 acres zoned single-unit. That is 3(13068)+ 5(5227.20)+ 2(2613.60). Thank you Country Boy. Great job, the answer of$1.62 per sf is correct. Now I will need to figure out how to memorize the way to solve this type of question. There are a few other practice questions I have. I will reverse engineer this equation, and hopefully after a few go through I will have it down. Your help is much appreciated.

Country Boy said:
Let C be the cost of one acre of "commercial land". Since "multi-unit land typically sells for 40% of commercial land prices" one acre of "multi-unit land" cost .4C. Since "single-unit residential land sells for 20% of commercial land prices" one acre of single-unit residential land" cost .2C.

"A similar 10-acre property recently sold for 1.80 per sf with 4 acres zoned commercial, 4 acres zoned multi-unit, and 2 acres zoned single-unit residential."

There are 43560 square feet per acre so 1.80 per sf is (1.80)(43560)= 78408 per acre.

So 4C+ 4(.4C)+ 2(.2C)= 4C+ 1.6C+ .4C= 6C= 78408. C= 78408/6= 13068 . One acre zoned commercial costs 13068, one acre zoned multi-unit cost .4(13068)= 5227.20, and one acre zoned single unit residential costs .2(13068)= 2613.60.

The question asks for the cost of 3 acres zoned commercial, 5 acres zoned multi-unit, and 2 acres zoned single-unit.

That is 3(13068)+ 5(5227.20)+ 2(2613.60).

Is "memorizing" all you can do? I recommend learning the basic definitions, tthen thinking!

## 1. How do I calculate the total cost of a property?

To calculate the total cost of a property, you need to add up all the expenses associated with purchasing the property. This includes the purchase price, closing costs, any loan fees, and any other additional costs such as inspection fees or appraisal fees.

## 2. How do I determine the monthly mortgage payment for a property?

To determine the monthly mortgage payment for a property, you will need to know the loan amount, interest rate, and loan term. You can use a mortgage calculator or the formula P = L[c(1 + c)^n]/[(1 + c)^n - 1] to calculate the monthly payment, where P is the monthly payment, L is the loan amount, c is the monthly interest rate, and n is the number of monthly payments.

## 3. What is the difference between gross income and net income?

Gross income is the total income earned before any deductions or taxes are taken out. Net income, on the other hand, is the amount of income left after all deductions and taxes have been paid. In real estate, gross income is often used to calculate potential rental income, while net income is used to determine the actual profit from a rental property.

## 4. How do I calculate the return on investment (ROI) for a property?

To calculate the ROI for a property, you will need to know the total cost of the property and the annual income generated from the property. The formula for ROI is (annual income - total cost)/total cost. This will give you a percentage that represents the return on your investment.

## 5. What is the 70% rule in real estate investing?

The 70% rule is a guideline used by real estate investors to determine the maximum price they should pay for a property. It states that an investor should pay no more than 70% of the after-repair value (ARV) of the property, minus the cost of repairs. This rule helps investors ensure they are making a profit on their investment and allows for unexpected expenses that may arise during the renovation process.

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