Assignment 2: Download the Sales Comparison Market Data (Excel® spreadsheet) and save to your computer to complete some of the exercises above.

Submit your responses in a Microsoft Word document along with your Excel spreadsheet to the Assignment Dropbox.

1. Consider a vacant lakefront lot measuring 90 by 120 feet in a residential subdivision. Three similar vacant lots have sold recently. Comparable number one measures 85 by 120 feet and is also located on the lake. It sold for $35,000 one week ago. Comparable number two is also on the lake, and it measures 85 by 120. It sold one year ago for $30,000. Comparable number three sold six months ago for $31,000. It is a hillside lot that offers an exceptional view. The lot measures 80 by 120 feet. Complete the market data grid provided to estimate the value of the subject property. (grid is attached)

2. An investor is considering the purchase of a 11,000-sq. ft. warehouse that is expected (based on comparable properties) to command $8.40 per square foot in annual rents. The two comparable warehouses have recently sold in the market. Comparable 1 measures 12,000 sq. ft. and sold recently for $450,000. Comparable 2 measures 8,600 sq. ft. and sold recently for $322,500. Compute the gross income multiplier that is implied

3. Suppose the investor in the previous problem is concerned that the subject property may be more expensive to operate than the comparable properties. Analysis of the operating expenses for each of the properties reveals the following net income estimates:
Subject Property $52,400
Comparable 1 $65,600
Comparable 2 $47,000

Compute the capitalization rate implied by these transactions to estimate the value of the subject property by the net income capitalization technique.

1. What is the primary objective of a property manager?

2. What are the general functions of a property manager?

3. What is the legal relationship between the property manager and the owner? What document creates this relationship?

4. What purpose do security deposits serve from the lessor's perspective? What does an asset manager do? How do these tasks differ from the traditional property manager's?

5. Describe the strategy known as sale-and-leaseback.

6. If a tenant fails to pay the rent on time, can the manager or landlord disconnect the utilities to encourage the tenant to cough up the dough?

7. Under what circumstances can a private property owner refuse to accept a tenant because of his or her gender, or race, or religion?

8. Why should a property manager carefully document the physical condition of the property at the beginning of a lease?

9. Define the concept of eviction.