Real Estate Fundamentals 15-18
what does it mean for an asset to have/be liquid? what are most liquid forms of asset? least?
liquid asset is one that can be converted into cash quickly, most liquid is money in bank account, can go to bank and take money out least liquid is stocks, bonds, mutual funds, and even real estate
three main characteristics of an investment
liquidity, safety, and return
what is a rental schedule? how it is used?
list of the rental rates assigned to each type of unit or space in the managed property rates vary depending on unit size location in the building and nay special amenities (such as view) tha certain units have selects proposed rates for each type of unit based on the info gather in the preliminary study
ADA three main requirements for public accommodations if it is readily achievable
1. architectural and communications barriers must be removed 2. auxiliary aids and services must be provided so that no dis. person is excluded, denied services, treated differently. 3. all new commercial construction must be accessible to the disable unless that would be structurally impractical
what are some of the exemptions of the Washing Law against Discrimination?
1. educational institutions may discriminate based on sex, marital status familial status in student housing. 2. private clubs and certain cemerteries and mausoleums operated by religious institutions may discriminate based on religion 3. discrimination based on familial status allowed in connection with property that qualifies as housing for older persons under the federal Fair Housing Act.
An operating budget for a managed property should list all normal operating expenses, which would include all of the following EXCEPT: Select your answer below: A.utility bills B.the management fee C.maintenance and repair fees D.debt service
D Debt service (the mortgage payment) on the property is not considered an operating expense
Federal Fair Housing Act
Tittle 8(VIII) of the civil rights act of 1968, most imp. antidiscrimination laws applies to only residential properties but very encompassing, basically covers all bases but sex orientation
WHAT IS a Return? what forms does it come in?
a return is an asset that is expected to generate a profit (return). return comes in the form of interest, dividends, rents, or appreciation in value.
what to do while performing a regional analysis?
an appraiser will look at certain characteristics of the city or metropolitan area in which the property is located, interested in occupancy rates, market rental rates, general employment levels and for residential property, family size and lifestyle.
Equal credit opportunity act
applies to all types of credit transactions, including mortgage lending, prohibits lenders from discriminating vs applicants on the basis of race, color, religion, national origin, sex, marital status, or age. also prohibits discrimination against loan applicants because all or part of their income is from a public assistance program
some of the advantages of investing in real estate 3
appreciation, leverage, cash flow
two requirement for private clubs to become exempt from fair housing act?
as long as lodgings arent open to the public and arent operated for a commercial purpose.
neighborhood analysis, what constitutes a neighborhood?
can be defined by physical boundaries, such as a body of water or a freeway, or may simply be a certain area in which the properties are similar in value, age , condition, architectural style or other characteristics.
what does appreciation do to an owners property
causes a property owners equity to increase, equity if the difference between the value of the property and the liens against it.
how is an investment determined to be safe?
considered sade if theres a little risk that the investor wil actually lose money on it some types of investment are very safe because they carry a form of guarantee
Price Fixing anti trust
cooperative setting of prices(brokerage commission rates) or price ranges by two or more competing firms
what are types of debt investments? ownership investments?
debt investments are loans and bonds, investor lends money for a period of time in return the money at a specific date along with a certain amount of interest ownership investments is real estate and stock market investments, return on ownership investments usually takes the form of dividents, rents, or appreciation.
leverage, advantage of investing in real estate
defined as using borrowed money to invest in an asset
property analysis, what factors to consider?
every aspect, including, # and size of living units, number of rentable sq ft, condition of building, condition of the rental spaces, services such as janitorial or security, size and effectiveness of the staff, appearance of rental spaces.
3 requirement for religious orgs to be exempt from fair housing act
fair housing act allows religious organizations dealing with their own property in noncommercial transactions, to limit occupant to, or give preference to, their own members. BUT membership of the organization cant be restricted on the basis of race, color, or national origin.
how would a property manager find out the cash flow figure?
find the cash flow figure by subtracting projected operating expenses from the estimated property income
what are the two types of operational expenses that an property manager would need to project? what are some examples of each of these expenses?
fixed expenses and variable expenses. fixed expenses: property taxes, insurance premiums, salaries. variable expenses: utilities, maintenance, repairs
what are the four types of transaction that are completely exempted from the fair housing act?
for sale by owner, owner occupied rentals, religious organizations, private clubs
appreciation, adv of investing in real estate
increase in the value of property due to changes in the economy, over several years real estate values usually increase at a rate equal to or higher than the rate of inflation
what is a management proposal? in the management plan
made by the property manager after the preliminary study is completed, its is a draft strategy to present to the property owner for approval the management proposal includes a proposed rental schedule income and expense projections, a plan for day to day operations and in some cases proposed physical changes to the building
office buildings, what are the main aspects of cost in a office building?
maintenance in main issue in office buildings, public bathrooms and office spaces leases are longer than residential, also rent based on price per square foot, rather than per unit escalation clauses are common, periodic rent increases, also more bargaining in an office lease
why must a property manager watch local employment trends when doing a regional analysis in an area?
must watch the local employment trends, the size of the labor force in a community determines how many potential residential tenants can afford to rent, a prop manager should also be aware of earnings trends, are they increasing or decreasing? failing wages may push rents downwards if there arent enough people who can afford rents at their current level
what are the two broad types of investments?
ownership investments and debt investments
Market Analysis for a property manager
provides the property manager with info about competing properties, this is the last step in the preliminary study for the management plan must ome last because its only after the manager has analyzed the region, the neighborhood and the property that she can define the pertinent market.
whats a tax shelter?
real estate is considered a tax shelter, in that it shelters a property owners investment income thru tax deductions and credits.
what kind/how many analysis' should a property manager perform to effectively address the owners goals in the management plan?
regional analysis, neighborhood analysis, property analysis, market analysis
what is a management plan?
sets forth the property managers strategies for achieving the property owners goals, addresses issues of financial management and the physical maintenance of the property
Managing residential properties, what are they?
single fam homes, apartments, developments with condos and co-ops
retail buildings, what about their leases, businesses inside, etc
tenant to pay landlord base rent plus a percentage of gross earnings they try to lease out successful businesses because the shops rely on each other. someone goes in to look at Nike store, end up staying at mall for 3 hours
what are some basic provisions of a property management agreement?
terms of the agreement, managers compensation, type of property, legal description of the property, frequency and level of detail of reports to owner, and number of units or square footage, also make clear which expenses the manager will pay and which the owner will pay
civil rights act of 1866
this law prohibits discrimination in real estate transactions on the basis of race or color. applies to all real estate
industrial properties? leases, etc
very large buildings, very specialized, very expensive to build, leases are long term (10-25 years) rapid turnover is financial disaster for a industrial property many property managers rely on leasing agents to find the right tenants, they research the prop, nearby transportation, etc to determine best tenants
A property management agreement is amended to take into account some changing circumstances. The amendment must be signed by the owner and: Select your answer below: A.the designated broker for the firm providing management services B.anyone who works for the brokerage company C.the tenant D.the tenant and the real estate licensee
A A property management agreement is a contract between a property owner and the real estate firm that provides the management services. It is not a contract between the property owner and an individual licensee, although in some cases a licensee may sign on behalf of his brokerage.
A person who uses a wheelchair moved into an apartment. At his own expense, the tenant lowered the light switches, removed carpeting from a hallway, installed handrails, and widened doorways. When the lease ends, the tenant will least likely have to restore which of the following to its original condition? Select your answer below: A.Doorways B.Handrails C.Carpeting D.Light switches
A A person who uses a wheelchair moved into an apartment. At his own expense, the tenant lowered the light switches, removed carpeting from a hallway, installed handrails, and widened doorways. When the lease ends, the tenant will least likely have to restore which of the following to its original condition? Select your answer below: A.Doorways B.Handrails C.Carpeting D.Light switches
A licensee hears that a religious group will be opening a commune in a neighborhood. He begins contacting neighbors and telling them about this, encouraging them to list their properties with him before property values decline. This is: Select your answer below: A.blockbusting B.redlining C.steering D.legal
A Blockbusting occurs when a licensee tries to induce homeowners to list their properties by predicting that persons from a protected class (usually on the basis of race, but also potentially on the basis of religion) will be moving into the neighborhood and that there will be undesirable consequences.0
A buyer would like to start out with a significant amount of equity invested in his house, so that he can reborrow against the equity if necessary. When structuring a loan, what should the buyer's highest priority be? Select your answer below: A.Largest downpayment possible B.Longest loan term possible C.Lowest interest rate possible D.Smallest downpayment possible
A Equity refers to the difference between the property's value and the loans against the property. Therefore, the larger the downpayment the buyer makes, the more equity in the property he will have initially.
Marian needs to rent out her basement to make ends meet. She doesn't place any ads for a tenant or ask for any help from a real estate agent--she merely asks some of her friends if they know of any potential tenants. She carefully screens all the prospects, and decides to rent only to a religious, non-smoking, white female. On which basis is it illegal for her to discriminate? Select your answer below: A.Race B.Gender C.Religion D.Smoking preference
A Marian falls under the "Mrs. Murphy" exemption to the federal Fair Housing Act, but there is no such exemption from the Civil Rights Act of 1866, which prohibits discrimination based on race.
Which law prohibits discrimination in real estate transactions based on race, with no exceptions? Select your answer below: A.Civil Rights Act of 1866 B.Civil Rights Act of 1964 C.Civil Rights Act of 1968 D.Fair Housing Act
A The Civil Rights Act of 1866 prevents discrimination based on race or color in any real estate transaction, without exception. The 1964 Act is limited to programs where the federal government offers financial assistance, while the Fair Housing Act (a part of the 1968 Act) is limited to residential transactions and has several exemptions.
A prospective tenant asks a licensee to show him only properties that do not allow children. How should the licensee respond? Select your answer below: A.Say that only bona fide retirement communities may exclude children B.Say that the law requires that all available properties must be shown C.Say that to do so would be steering, and therefore illegal D.Show properties that are billed as "adults only"
A The Fair Housing Act forbids "adults only" apartment complexes. There is, however, an exemption for properties that qualify as "housing for older persons," such as those intended for and solely occupied by persons 62 or older.
The manager of a six-story, 18-unit apartment building carefully screens tenant applications to make sure that tenants who use wheelchairs are assigned to the first floor. This: Select your answer below: A.is allowed if there's no elevator to the upper floors B.is an example of a property manager making reasonable accommodations C.violates the Fair Housing Act D.violates the Civil Rights Act of 1866
A The Fair Housing Act has wheelchair-accessibility requirements for apartment complexes built since 1991. However, apartments on the second floor or above in multi-story buildings do not have to be wheelchair-accessible if there is no elevator in the building.
Which of the following is the best example of non-discriminatory language, according to HUD's guidelines for the Fair Housing Act? Select your answer below: A.Female seeking female roommate B.Nice neighborhood for families with kids C.No children please D.Walking distance to great Catholic school
A The Fair Housing Act imposes a general prohibition against advertisements that indicate either a restriction (as in answer C) or a preference (as in B and D) related to a protected class. However, the act has an exemption for owner-occupied rentals, and that would allow a female homeowner to advertise for a female roommate without violating the law.
A minority buyer with a disabled daughter makes a full-price offer on a property. The home doesn't have any grab bars in the bathroom and the front door isn't wide enough for a wheelchair. The seller informs the buyer's agent that the property wouldn't be suitable for the daughter, so he is going to refuse the offer. The buyer's agent should: Select your answer below: A.explain the situation to the buyer, and advise her to consult an attorney and/or file a complaint with HUD B.instruct the seller to make those modifications at his own expense C.not say anything to the buyer about the circumstances, but help her find a more suitable property D.not say anything to the buyer, since a seller can choose who to sell his home to
A The Fair Housing Act prohibits the seller from refusing to sell his property because of a disability of the buyer or a family member of the buyer. The buyer's agent should let the buyer know about her options for legal recourse.
Which of the following is exempt from the federal Fair Housing Act? Select your answer below: A.Commercial or industrial property B.An eight-unit multi-family dwelling C.A triplex listed for sale with a real estate broker D.A vacant lot intended for residential construction
A The federal Fair Housing Act applies to residential properties, not commercial or industrial properties
Washington Fairness in Lending Act
A lending institution may not reject a single family home loanapplication because the home is located in a particular area or require higher interest rate/downpayment because of location of home
The protected class of "familial status" in the federal Fair Housing Act refers to the presence of: Select your answer below: A.adult children of tenants living on the property B.children under the age of 18 living on the property C.persons over the age of 65 living on the property D.unmarried persons living on the property
B Discrimination based on familial status refers to discrimination against someone because a child (a person under 18 years old) is or will be living on the property. In addition to parents, this rule protects legal guardians, pregnant women, and people in the process of obtaining custody of a child.
Which of the following is typically included in a management agreement? Select your answer below: A.Certificate of occupancy B.Authorization for the property manager to pay expenses C.Joint survivorship D.Waiver of subrogation
B Management agreements usually authorize the manager to pay expenses related to the management of the property.
All of the following are true about the ADA, EXCEPT: Select your answer below: A.Any employer with 15 or more employees must make reasonable accommodations for disabled employees B.Public accommodations include stores, hotels, real estate offices, private clubs, religious organizations, and personal residences C.Real estate offices are covered by the ADA D.The purpose of the Act is to ensure equal access to both jobs and public accommodations by the disabled
B Places of public accommodation include a wide range of entities, such as restaurants, hotels, theaters, doctors' offices, pharmacies, retail stores, museums, libraries, parks, private schools, and day care centers. Private clubs and religious organizations are exempt from the ADA, as are personal residences.
A local bank refuses to make residential loans in a particular section of town, because of the ethnic background of its residents. This is a discriminatory practice called: Select your answer below: A.blockbusting B.redlining C.steering D.collusion
B Refusing to make loans for discriminatory reasons is redlining, which is illegal.
An agent shows his customer, who is an Asian-American, homes only in neighborhoods that are predominantly Asian-American. This is called: Select your answer below: A.panic selling B.steering C.blockbusting D.redlining
B Steering is the practice of guiding prospective buyers or renters toward or away from certain neighborhoods based on national origin, race, or any of the other protected categories, in violation of fair housing laws.
All of the following must comply with the Americans with Disabilities Act, except a: Select your answer below: A.strip mall with less than 4 businesses B.church C.motel with less than 10 units D.real estate brokerage
B The ADA applies to businesses and other facilities open to the public, as long as they affect commerce, including hotels, restaurants, and brokerage firms.
In a sale-leaseback: Select your answer below: A.the grantor becomes the grantee B.the grantor becomes the lessee C.the broker has purchased the property D.the property is sold at a loss
B the grantor sells property but remains in possession as a lessee
An investor is interested in purchasing a multi-family dwelling. He would most likely want to look for a: Select your answer below: A.property that will offer a low rate of return B.property where the rents are similar to comparable properties in the same area C.property with a high vacancy rate D.rent-controlled property
B A key area of inquiry for an investor's market analysis is the rents charged by comparable properties. Investors want to buy properties that compete effectively with other properties in the same market. A rent-controlled property, a property with a high vacancy rate, or a property with a low rate of return for some other reason would probably not be as desirable.
A property manager of a ten-unit building shows an apartment to a woman who uses a wheelchair. The woman says that she would need to make some modifications, such as adding grab bars in the shower and removing some carpeting in the bedroom. The landlord: Select your answer below: A.can refuse to rent to the tenant because of the tenant's proposals B.must allow the tenant to make the modifications at her own expense, but can require her to restore the property at the end of the lease C.must allow the tenant to make the modifications at her own expense, and cannot require the tenant to restore the property at the end of the lease D.must make the modifications and pay for the expenses himself
BT he Fair Housing Act says that a disabled tenant may make reasonable modifications to a leased property at her own expense. The tenant can be required to restore the premises at the end of the tenancy
Which of the following actions is exempt from the federal Fair Housing Act's prohibition on discrimination? Select your answer below: A.A private club operating a senior citizens' home for profit B.A real estate broker who owns four homes and is selling her own home, provided the property is not listed with a brokerage C.A religious organization that gives preference to its members in leasing church-owned property, provided there is no discrimination applied in church membership D.A landlord of a triplex who refuses to rent to a potential tenant because of her race, where the landlord does not live in one of the units
C
A property manager bases the operating budget on: Select your answer below: A.rental rates B.the rental market C.anticipated expenses and revenue D.state landlord-tenant law
C A property manager's proposed budget is based on what she expects income and operating expenses will be. The manager subtracts proposed expenses from projected revenues to determine expected cash flow
Which of the following rental transactions would be covered by (not exempt from) the Fair Housing Act even if no real estate agent were involved? Select your answer below: A.Owner-occupant rents a unit in a four-unit dwelling, using a nondiscriminatory ad B.Owner-occupant of a duplex rents to a neighbor's son without advertising the unit C.Rental of a unit in a triplex, using no discriminatory advertising D.Owner rents out one room in her residence, without using any advertising
C A residential rental transaction can be exempt from the Fair Housing Act only if the property is a single-family home and the owner has no more than three such homes, or if the property has no more than four units and the owner is residing on the property. Option C does not indicate that the owner is occupying one of the units in the triplex, so the Fair Housing Act would apply to the transaction.
A property manager manages two large apartment buildings. They're older but well-maintained properties with a 96% occupancy rate. Based on analysis of market rates, the property manager should: Select your answer below: A.lower rental rates to get to 100% occupancy B.maintain the status quo C.raise rents, if competitive market analysis confirms this D.refurbish the properties to improve desirability
C Certainly the manager should raise (or lower) the rents if a competitive market analysis confirms the move. Only answer C is definitely true in all cases--the CMA determines what level to set rents. (While answer A has some appeal, it's not the best answer: there might be reasons not to lower rents even to achieve higher occupancy. For example, perhaps a major employer is expanding soon and it would be a mistake to lock these units in at cheap prices.)
An Asian-American buyer asks to be shown homes that are located in neighborhoods that he knows are primarily Asian. If a real estate agent complies with his wishes, this is: Select your answer below: A.illegal, as it is blockbusting B.illegal, as it is steering C.legal, as it is done at the buyer's request D.legal, as the Fair Housing Act has an exception for single-family homes
C It is legal for an agent to show a buyer homes in the neighborhoods that the buyer has chosen, even if the buyer chose the neighborhoods based on race. Nothing in the Fair Housing Act requires an agent to show buyers houses against their will.
The best description of steering is: Select your answer below: A.recommending to residents of a neighborhood that they sell because persons of a particular race are increasingly moving into the area B.refusing to make loans in a neighborhood based on the race of the residents C.showing buyers of a particular race only properties in neighborhoods with many residents of that race D.telling a buyer of a particular race that a property has been sold when in fact it hasn't
C Steering involves channeling buyers or tenants of a particular protected class either toward or away from a neighborhood based on the presence or absence of that protected class.
Leo owns the six-unit apartment building in which he lives. When a tenant moves out, he advertises the unit this way: "For Rent: Vacant apartment on very busy street. No children or pets." According to the federal Fair Housing Act, as amended in 1988, is the ad legal? Select your answer below: A.Yes, because individual owners are exempt from fair housing laws B.Yes, provided a real estate agent isn't used C.No, because landlords cannot declare residential units to be unavailable to families with children unless the property meets the specific legal requirements of housing for older persons D.No, because the fair housing laws only apply to properties with more than six units
C only properties that meet the legal requirement of housing for older persons can prohibit children
In the Fair Housing Act, as amended in 1988, "familial status" refers to: Select your answer below: A.families that consist of at least two adults and one child under 18 years of age B.families that consist of at least two adults and any dependent children, regardless of age C.any family with at least one dependent child under the age of 18 D.any family with a dependent child under the age of 18 or a dependent adult over the age of 55
C the requirement is at least one adult and at least one dependent under the age 18, they do not have to be related by blood or by law.
A seller tells a real estate agent that she has lived in the neighborhood for a long time and would like to be selective about who buys her house; she would like the agent to tell her the race and nationality of all prospective buyers. How should the agent respond? Select your answer below: A.Agree to it, but avoid using any discriminatory advertising B.Agree to it, as the agent owes the seller the duty of loyalty C.End her agency with the seller, as the agent's duty is to find the most lucrative offer for the seller regardless of race D.End her agency with the seller, as it would be a violation of the federal Fair Housing Act
D
A property management agreement must contain which of the following? Select your answer below: A.A salary for the property manager B.What percentage of the property's net income will be used as the manager's commission C.Marketing plans D.The property manager's scope of authority
D Any property management agreement should include the scope of the manager's authority, such as whether he can collect and disburse funds. It should also discuss the manager's compensation, but the compensation need not take the form of salary; it could be by commission, for example.
A prospective tenant applies to rent a unit in a 12-unit apartment building, where the owner lives in one of the units and handles all lease transactions on his own. The tenant is turned down, and believes he has been discriminated against on the basis of his race. If true, this would be: Select your answer below: A.lawful, because no discriminatory advertising was used B.lawful, because the owner lives on the premises C.lawful, because no real estate agent was used D.unlawful, because this is a 12-unit building
D If the rental application was in fact turned down because of the tenant's race, this would be a violation of the Fair Housing Act. There is no exemption that applies to this transaction: even though the owner lives on the premises and did not employ a real estate agent, the "Mrs. Murphy" exemption only applies to dwellings with four or fewer units. Note in addition that the Civil Rights of 1866 flatly prohibits racial discrimination in housing, without regard to building size or any other factor.
What is the most important consideration for a property manager who is deciding on appropriate rental rates? Select your answer below: A.How many units are in the property B.Proximity of the property to places of employment C.The number of units available in the city D.The rental rates for similar properties in the same market
D In a market analysis, the manager examines competing rental properties to help him to set appropriate rental rates.
One tax advantage of investing in real estate is: Select your answer below: A.high liquidity B.low risk C.homestead protection D.sheltering of income
D Real estate investment is often thought of as a "tax shelter" because it serves to partially shelter investors from income tax liability
One of the provisions of the Housing for Older Persons Act: Select your answer below: A.creates a cause of action for lawsuits concerning misrepresentation of the nature of a 55+ property B.exempts grandparents who will have grandchildren visiting C.requires that facilities and services for elderly persons must be available in housing that is specifically for persons 55 or older D.requires that in qualified projects, at least 80% of the units must be occupied by persons 55 years or older
D The Housing for Older Persons Act establishes criteria for projects that are exempt from prohibitions against familial status discrimination. This exemption includes projects with at least 80% of the units occupied by at least one person 55 years or older. The act, however, does not require that projects must provide facilities and services for elderly persons.
Vandelay Industries sells its office building to Howard Holding Co. in order to raise some cash, but leases it back from them, so they won't have to move. Once this transaction closes, what kind of interest does Vandelay have in the property? Select your answer below: A.Fee simple defeasible B.Freehold estate C.Life estate D.Non-freehold estate
D The selling party in a sale-leaseback transaction will have a leasehold interest (in other words, a non-freehold interest) in the property once the transaction is completed.
A property manager decides to offer some additional services beyond what is specified in the property management agreement. She may do so after: Select your answer below: A.giving the tenants 30 days' notice B.obtaining written authorization from the owner C.providing notice to the Department of Licensing D.the management agreement is amended in a writing signed by the owner and designated broker
D Whenever the duties and powers of a property manager change, the property management agreement (the document that describes the scope of a property manager's authority) must be amended.
equal credit opportunity act vs the home mortgage disclosure act?
ECOA targets more individual acts of discrimination HMDA is aimed at detecting redlining in particular neighborhoods
It is legal for a property manager to: Select your answer below: A.collect a larger security deposit from tenants with a service animal B.obtain employment information to determine if a tenant can afford the rent C.refuse to rent to families with children D.refuse to allow a disabled tenant to install grab bars in the bathroom
Property managers may take steps to determine whether or not a tenant is able to afford the rent, such as requesting employment and credit information. Antidiscrimination law makes it illegal to charge a disabled person a security deposit for her service animal. Note that the disabled tenant is liable for any damage the animal actually causes, however.
Which of the following describes a violation of the Americans with Disabilities Act? Select your answer below: A.A recently built one-story apartment complex with doorways too narrow for wheelchair users B.A rental house that does not have a wheelchair ramp at its entrance C.A shopping center without wheelchair-accessible restrooms D.An older 40-unit apartment building without elevators
The correct answer is CThe Americans with Disabilities Act requires public accommodations to be accessible to the disabled. This would include a shopping center, as it is open to the public and affects commerce. The ADA does not apply to residential properties (although the Fair Housing Act does impose some restrictions on new apartment construction).
Under Title VIII of the Civil Rights Act of 1968, certain transactions are exempt. Which one of the situations below would be exempted and not a violation of the act? Select your answer below: A.A church-owned apartment complex where language in the lease restricts tenancy to members of a specific national origin B.Members of a certain ethnic group are denied lodging in facilities operated by a private club for commercial purposes C.An unlisted home that is for sale by owner, where the only advertising is a sign in front of the property that reads simply "For Sale" and the owner owns only one other home D.An absentee owner who rents units in a four-plex without the help of a real estate agent
The federal Fair Housing Act (Title VIII of the Civil Rights Act of 1968) does not apply to the sale or rental of a single-family home by its owner, provided that the owner doesn't own more than three such homes, no real estate agent is used, and no discriminatory advertising is used.
Property management agreements generally include provisions on all of the following EXCEPT the: Select your answer below: A.amount of the security deposit that must be collected from each tenant B.manager's authority to pay property expenses C.starting and termination date of the agreement D.manager's responsibility to provide the owner with management reports
a Deposit amounts are found in the rental agreements, not the property management agreement.
group boycott anti trust
agreement between two or more competing businesses to exclude another competitor from fair participation in the market, the purpose of this group is to destroy competitors, which is illegal
Home mortgage disclosure act
aims to prevent redlining in certain neighborhoods, big lenders have to submit reports on the loans that they made for the year, if they made few or no home loans in a particular neighborhood, the govt will investigate if redlining played a part
why is familly size and lifestyle important to study for property managers?
imp when determining the rental value of particular residential units, if the typical family in seattle is a married couple with two children, a property manager is able to rent a 3 bedroom house more easily then a 5 bdrm, so can charge more per sq ft for a 3 bd than a 5 bd.
remedies if a plaintiff wins a lawsuit for discrimination? 3
injuction, compensatory damages, punitive damages
Civil rights act of 1964
it prohibits discrimination based on race color religion or national origin in many programs and activities that recieve financial assistance from the federal govt
why would a property manager keep an eye on occupancy rates and market rental rates?
ocupancy rates determine supply vs demand, imp when setting prices, keep an eye on market rental rates because you want to stay competitive in the rental market while still making a profit, rental rates are the rents currently being charged for comparable properties.
what is the statute of limitations for filing a complaint for discrimination? how long for a lawsuit to be filed?
one year to file a complaint from date of discrimination to the dept of housing and urban development., two years to file a lawsuit
4 requirement for home for sale to be exempt by fair housing act?
owner cannot own more than three homes, no discriminatory advertising, does not use a broker cant only use this exemption once every 24 months if the OWNER IS NOT the most recent occupant
owner ship and debt investments, what are they, what are ex of each?
ownership investments comes in the form of stocks and real estate. usually the return comes in the form of dividends, rents and/or appreciation debt investment are really loans from an investor, investor lends money for a period of time, borrower promises to repay the money at a specific date along with a certain amount interest
four main types of violations for anti trust laws
price fixing, group boycotts, tie-in arrangements, market allocation
3 requirement for an owner occupied rental to recieve exemption from fair housing act?
property must be owner occupied, cannot advertise discriminatory images/words etc, cannot have a real estate broker involved.
what is the yield on an investment? general rule for yield?
the return on an investment (ROI) is often referred to as yield general rule is the greater the risk the higher the potential yield needs to be, higher yields from long term investments,
how to generate cash flow with real estate
rental income is one way that real estate can generate cash flow, another way is thru sale leaseback arrangement also sometimes this arrangement will include a buyback arrangement
four main kinds of income producing properties?
residential, office, retail, and industrial
cash flow, advantages in investing in real estate
the cash flow is the amount of money left over after all the properties expenses have been paid, basically monthly income
what is an injunction?
the court can issue an injunction ordering the defendant to stop the violation
what is compensatory damages?
the damages cover the losses or expenses incurred, and may also include compensation for the emotional distress and humiliation suffered as a result of the discrimination.
What are punitive damages?
the defendant may be ordered to pay punitive damages instead of, or in addition to; compensatory damages, punitive damages are intended to punish the defendant and discourage others from discriminating in some discrimination cases the punitive damages are substantial, amounting to hundreds of thousands of dollars
neighborhood analysis, what factors to consider?
the economic status of the residents or users, the occupancy rate, whether the population is growing or shrinking, and how well the properties are maintained.
what is a sale leaseback arrangement? cash flow,
the owner of the building used in the owners business sells the building to an investor, but then leases it back,
what is a buy back agreement?
the seller will buy the property back at fair market value after a certain number of years.