Podcast
Questions and Answers
Which factor is least likely to influence location decisions?
Which factor is least likely to influence location decisions?
- Need to cater to ultimate users
- Zoning and building codes
- Convenient access to linked sites
- The size of the developer's team (correct)
What does the subdivision process include?
What does the subdivision process include?
- Title acquisition (correct)
- Improvement of sites (correct)
- Investor recruitment only
- Land planning (correct)
When are land acquisition and development loans typically disbursed?
When are land acquisition and development loans typically disbursed?
- Upon loan approval or at the start of development (correct)
- When the borrower feels ready
- On a monthly basis during construction
- After the project completion
What is the net present value of the given investment scenario?
What is the net present value of the given investment scenario?
Which of the following is NOT a method of government land use control?
Which of the following is NOT a method of government land use control?
Which option is an example of a common interest subdivision?
Which option is an example of a common interest subdivision?
What is a crucial element in successful land use planning?
What is a crucial element in successful land use planning?
Which financing option typically has the least restrictions?
Which financing option typically has the least restrictions?
What aspect of land development is influenced by zoning laws?
What aspect of land development is influenced by zoning laws?
What is the aftertax cash flow of an investment with a tax deductible loss of $33,634, a pretax cash flow of ($8,634), and an investor in the 28% tax bracket?
What is the aftertax cash flow of an investment with a tax deductible loss of $33,634, a pretax cash flow of ($8,634), and an investor in the 28% tax bracket?
When considering a subdivision project, which factor is important for its success?
When considering a subdivision project, which factor is important for its success?
What is the first step in determining the aftertax cash flow for an investment?
What is the first step in determining the aftertax cash flow for an investment?
How do you calculate taxable income from sales, development costs, and operating expenses?
How do you calculate taxable income from sales, development costs, and operating expenses?
What is a significant benefit of subdividing land?
What is a significant benefit of subdividing land?
In relation to a subdivision project, what is the importance of location?
In relation to a subdivision project, what is the importance of location?
Flashcards
Subdivision
Subdivision
The process of preparing a piece of land for development, often involving creating individual building lots by adding roads, sewers, and sidewalks.
Tax Deductible Loss
Tax Deductible Loss
A reduction in taxable income that can lower an investor's tax liability.
Pretax Cash Flow
Pretax Cash Flow
The money remaining after all expenses are paid, but before taxes are considered.
Aftertax Cash Flow
Aftertax Cash Flow
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Tax Bracket
Tax Bracket
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Taxable Income
Taxable Income
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Development Costs
Development Costs
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Operating Expenses
Operating Expenses
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Location
Location
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Option
Option
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Types of Subdivisions in California
Types of Subdivisions in California
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Subdivision Process Stages
Subdivision Process Stages
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Land Acquisition and Development Loan Disbursement
Land Acquisition and Development Loan Disbursement
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Net Present Value (NPV) Calculation
Net Present Value (NPV) Calculation
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Government Land Use Control
Government Land Use Control
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Monetary and Fiscal Policy
Monetary and Fiscal Policy
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Location Decision Factors
Location Decision Factors
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Less Important Location Factor
Less Important Location Factor
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Subdivision Process
Subdivision Process
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Title Acquisition in Subdivision Process
Title Acquisition in Subdivision Process
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Study Notes
Subdivision Types in California
- California subdivisions include standard, common interest, and undivided interest subdivisions.
Location Decisions
- Factors least likely to influence location decisions: interest rates and amortization terms.
- Important factors: responsiveness to user needs, access to linked sites, zoning/building codes.
Subdivision Process
- Subdivision involves title acquisition, land planning, and improvements.
Land Acquisition and Development Loans
- Loans are disbursed piecemeal as improvements are completed, not upon approval, project completion, or on demand.
Investment Net Present Value
- Given a $1,716,969 present value of equity, $1,600,000 initial outlay, $10,240,000 financing and $3,840,000 in improvements, the net present value is $116,969.
Government Land Use Control
- Government land use control includes zoning, master plans, public utility control, and building/environmental regulations.
- Monetary and fiscal policy are not a typical method of land use control.
Tax Deductible Loss and After-Tax Cash Flow
- A tax deductible loss of $33,634 and pretax cash flow of ($8,634), with a 28% tax bracket, results in an after-tax cash flow of $784.
Subdivision Process Details
- Land improvement activities in subdivisions include adding roads, storm sewers, and sidewalks.
- Subdivision involves land surveying and dividing it into building lots.
- Construction of buildings is part of the development process, not separate from subdivision.
- Selling individual lots is a critical final step.
Sales, Costs, and Taxable Income
- With $4,356,000 in sales, $1,850,000 development costs, and $2,400,000 operating expenses, taxable income is $106,000.
Subdivision Project Consideration
- Location considerations for subdivisions include responsiveness to user needs and review of the master land-use plan.
- An option allows time for project feasibility assessment.
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Description
Test your knowledge on California's subdivision types, location decisions, and the subdivision process. Explore the complexities of land acquisition, development loans, and government land use controls. This quiz will challenge your understanding of these vital real estate concepts.
