Steven put down $10,000 toward a property's purchase price, financed the rest, and
now has a cash flow of $2,800 after repairs and debt service. What's
... [Show More] his ROI?
a 21%
b 26%
c 28%
d 32% - c 28%
Return on investment or ROI = cash flow ÷ cash investment. $2,800 ÷ $10,000 =
28%.
What's a legal agreement or promise made between two parties?
a. A consideration
b. A covenant
c. A handshake
d. A negotiation - b. A covenant
A legal agreement or promise made between two parties is a covenant.
Which type of commercial property offers parking surrounding the outside of the
property, but also indoor parking beneath the building?
a. Community shopping center
b. Neighborhood shopping center
c. Regional shopping center
d. Strip store - c. Regional shopping center
**Regional shopping centers are usually enclosed, with stores facing inward and
connected by a common walkway. Parking is available surrounding the outside of
these centers, although some have indoor parking beneath the building, as well.
During the option period to renew a lease, who determines whether the option will
be exercised?
a. Either the landlord or the tenant can make the decision.b. It must be mutually agreed to by both the landlord and the tenant.
c. The landlord makes the decision.
d. The tenant makes the decision. - d. The tenant makes the decision.
**When there's an option period in play, the lease can be renewed at the sole
discretion of the tenant. The landlord has no say in whether the option will be
exercised (or not).
Gary leases a commercial building and pays all expenses related to the building,
including taxes and insurance. Gary has a ______.
a. Gross lease
b. Net lease
c. Percentage lease
c. Sublease - b. Net lease
**With a net lease, the tenant pays some, or all (in the case of a triple net lease),
expenses.
Which of these is a static risk?
a. A decline in economic conditions in the area
b. Change in tax code
c. Fire damaging the building
d. Market change - c. Fire damaging the building
**Static risks are those where the effect can be lessened with insurance. This
includes vandalism, theft, fire, and accident liability.
How many dwelling units does a multi-family residential property have?
a. Five or more
b. More than one but fewer than six
c. One to four
d. Two or more - d. Two or more
**A multi-family residential property has two or more dwelling units.
Which REIT type specializes in owning certain building types, such as apartments
or office buildings?a. Commercial cap
b. Equity
c. REMTs
d. Tax-deferred - b. Equity
**Equity REITs invest in specific building types, such as apartments, shopping
malls, self-storage facilities, office buildings, and hotels.
Victims of fair housing discrimination can seek redress in federal court. Within
how many years of the alleged violation do they have to do so?
a. Four years
b. One year
c. Three years
d. Two years - d. Two years
**Victims may seek redress in federal court within two years of the alleged
violation. There is no limit on the amount of punitive damages that may be
awarded to a victim in federal court.
Your client, Gabriel, has invested in a rental property. He looks at his property's
operating statement, tweaks the numbers based on his knowledge of the market,
and re-works the statement. Gabriel has created ______.
a. A debt service statement
b. A gross income statement
c. An operating income statement
d. A pro-forma statement - d. A pro-forma statement
Remember that Gabriel is changing the numbers of the operating statement based
on his knowledge of the market.
What's a land banker?
a. A financier of raw land
b. An appraiser who works with lenders to value raw land
c. An investor who buys land, develops it, and leases it
d. An investor who holds land in inventory - d. An investor who holds land in
inventory**A land banker holds improved land or lots in inventory, banking on
appreciation. [Show Less]