RE Investments - TX Continuing Education

The term "ad valorem" is Latin for ______.

"According to value"

Which of the following is an advantage to investing in a single-family home rental?

Ability to depreciate an appreciating asset

Which type of value is used to calculate property taxes?

Assessed value

In the capitalization formula, what does the I stand for?

Income

Private loan companies may place a ______ on the property for which the loan is being taken.

Lien

Mortgage bankers are mostly what type of enterprise?

Private

As responsibility for the property is transferred, the manager should pay special attention to ______.

The accounts payable ledger

Juan purchased a property for $420,000 and financed $336,000 of it. The assessed value of the property is $387,000. The property appraisal came in at $432,000. Which of these amounts is used in calculating the property tax?

$387,000

Your client Joseph has a commercial income-producing property. How long does he depreciate this property?

39 years

When modifying office buildings to meet accessibility requirements, owners should focus on these four areas: accessible approach and entrance, ______, access to restrooms, and any other necessary measures, such as access to public amenities.

Access to goods and services

Which one of the following could apply to closing costs for an investment property?

Amortized over the life of the loan

Which of the following is an example of a reverse exchange?

An investor finds and closes on an investment property and then decides to immediately sell another investment property.

What is dynamic risk?

An uninsurable business risk resulting from economic, tax, and market changes

Which of the following must developers register with the Consumer Financial Protection Bureau?

Any subdivisions that have 100 or more nonexempt lots

Which document is used to create a corporation?

Articles of incorporation

Which special lease clause stipulates that the tenant is allowed to assign or sublet the rented space to a sublessee if the tenant has a change in circumstances?

Assignment/subletting

Dynamic and static risk are considered ________ risks.

Business

Joaquim analyzed a potential opportunity and determined that if he invested $250,000 in the commercial property, he'd likely see a return of 12% on this investment. After several years, Joaquim is seeing a measly 2% return. What type of risk did he fall victim to?

Business risk

In this type of corporation, stockholders, directors, and company officers are typically the same people.

Close

Understanding her tenants' business and their plans for future expansion, Terry is thinking about what changes would need to be made to the design, floor plan, and power requirements, and who will pay for the build out. Which office building property manager's duty is this?

Considering growth for tenants

How do you calculate maximum loan?

Divide annual debt service cost by loan factor

In which of the following scenarios is impossibility of contract performance occurring?

Due to circumstances beyond their control, the parties can't legally or practically do what they've agreed to do.

Good real estate investors tend to make decisions based primarily on ______.

Education and analysis

What happens during an abatement period?

Existing properties are charged the usual property tax on the property's pre-improvement value only.

What phrase describes the amount that today's dollars grows to over time?

Future value

Which of the following does the use provision in a lease describe?

How the tenant will use the property, including allowable activities

Which type of real estate investment trust derives its income from the rent or sale of property and interest dividends?

Hybrid REIT

When considering a development in a particular area, the investor should consider nearby amenities—from restaurants and recreational facilities to churches and schools—as well as access to public transportation, parking, and utilities. As a group, these factors are all considered an area's __________.

Infrastructure

Wrap-around loans are a form of ______ financing.

Junior

Mandy is researching demographics, income levels, types of industries in the area, and nearby buildings. She wants to know what her building offers compared to the other office buildings in the area. Which office building property manager's duty is this?

Knowing the competition

Which of the following is an advantage of leasing for a single-lot investor?

Leasing gives the investor an income stream for the term of the lease.

Which of the following is an essential element of a valid real estate contract?

Legal purpose

Carla Ricardo has been offered her dream job in another state. She asks her current landlord to let her out of her lease early. The landlord agrees to do so, with no strings attached. Carla and her landlord have decided to terminate the contract through ______.

Mutual agreement

What does NCUA stand for?

National Credit Union Administration

Gary leases a commercial building and pays all expenses related to the building, including taxes and insurance. Gary has a ______.

Net lease

Who's responsible for planning promotional activities for a regional shopping center?

On-site property manager and merchants' association

For the vast majority of loans, a single late ______ does not automatically mean the loan has gone into default.

Payment

Tyra owns a nail salon that's located in a strip mall. Her rent every month includes $1,800 base rent and 10% of her gross sales. What kind of lease does Tyra have?

Percentage

What type of asset is held in a land trust?

Real estate

Cooperative owners are actually called ______.

Shareholders

Mary lives in a cooperative. That means she owns ________.

Shares in a corporation

Which of the following involves street specifications, lot size, single- or multi-family dwellings, utilities provided and easements, how far houses must be set back from property lines, and drainage requirements?

Subdivision regulations

Which of the following is a residential property manager's duty?

Tenant screening

Which of the following statements is true about constructive eviction?

The court may award damages to the tenants.

In response to the increase in foreclosures and losses on their balance sheets, not to mention a reduced market for subprime loans, many lenders slowed their lending activities. What was the impact of this on the overall economy?

The economy headed into a recession.

The capitalization process uses a capitalization rate, which is based on what?

The performance of comparable properties

What is business risk?

The risk that the required return on investor capital will not be met

Which of the following statements best describes the 95% rule as it relates to tax-deferred exchanges?

The total value of the property (or properties) selected as exchanges must be at least 95% of the value of the property being sold.

Deborah wants to invest in a community shopping center. What size trade area can she plan to service?

Three- to six-mile

Which statement correctly identifies a federal fair housing law and what it addresses?

Title VIII of the Civil Rights Act of 1968 prohibits housing discrimination based on race, color, national origin, and religion.

When discounted cash flow analysis is used, income that will be received in the future is discounted. Why?

To account for inflation and the time value of money

All trusts have three parties: the trustor, the beneficiary, and the ______.

Trustee

Which document details the duties of the condominium board and the scope of its power?

Bylaws

Land doesn't just cease to exist, a characteristic called ______. This is one reason that long-term, complex financing arrangements can be used.

Permanence

Egbert owns property in which he lives in one unit and rents out the other four units to tenants. What type of investment does Egbert have?

Plex

Marcia Weinstein dies, and her property is not held in a trust. Thus, her estate will go through ________ to ensure her property is distributed to her heirs in accordance with her will.

Probate

If you and a sibling both inherited your father's property when he died, what type of deed would you need to get from your sibling in order to be the sole owner of the property?

Quitclaim deed

What type of real estate investment must distribute 95% of its income to beneficiaries?

Real estate investment trust

Liz is assisting a client who's looking for a commercial space to lease. Which of the following duties will Liz be expected to perform on her client's behalf?

Represent her client's interest in all negotiations and transactions regarding the lease of the property.

Bob signed a contract to purchase Ingrid's apartment building. Bob decided he didn't want to be a landlord, and Ingrid decided she didn't want to sell and move to Maui. They mutually agreed to cancel the contract, and Ingrid returned Bob's earnest money. This is referred to as ______.

Rescission