30 Hr Section 10 Quizzes

Successful investors should treat investing as ______. A) A business that requires planning, time, organization, and expertise B) A game, like gambling, but without rules, where the motto is, "The end justifies the means" C) A hobby, so if any money is lost, they don't lose heart and drop out of the game D) A passion into which they completely throw themselves, and rely on their gut instincts

A) A business that requires planning, time, organization, and expertise

Investors who maintain strong relationships with local ________ will have a source of information about trends in commercial property values and net operating incomes. A) Appraisers B) Financial analysts C) Government officials D) Real estate investment bloggers

A) Appraisers

Marcie bought a duplex, lived in one half, and rented out the other half. This is an example of what type of investing? A) Buy and hold B) Fix and flip C) Passive D) Wholesaling

A) Buy and hold

When prices go down because there are too many homes on the market and too few buyers, what economic principle is at work? A) Competition B) Conformity C) Progression D) Regression

A) Competition

Which of these principles of value is related to how a change to a portion of a property impacts the value as a whole? A) Contribution B) Impact on value C) Plottage D) Progression

A) Contribution

Which of these would be considered a submarket within the investment strategy segment? A) Fix and flip B) Industrial C) Residential D) Rural

A) Fix and flip

Beverly decided to sell her income property, as the need for __________ wasn't what she wanted from an investment. A) A tax shelter B) Constant management C) Low but reliable returns D) Personal control

B) Constant management

As foreclosures increased in 2007, what was the response from lenders? A) Borrow money from the federal government B) Decrease lending activity C) Increase lending activity D) Refinance mortgages for troubled homeowners

B) Decrease lending activity

Allen picked up remodeling skills from his family's construction business. Which of the following real estate investments is most suited to these skills? A) Buy and hold B) Fix and flip C) Limited partnership D) Wholesaling

B) Fix and flip

Land doesn't just cease to exist, a characteristic called ______. This is one reason that long-term, complex financing arrangements can be used. A) Immobility B) Permanence C) Slowness of response D) Uniqueness

B) Permanence

Real estate investor Dianne utilizes several strategies for staying on top of market trends, but one of her favorites is visiting an area and seeing what's happening. What strategy does this activity demonstrate? A) Internet resources B) Personal observation C) Relationship with commercial lenders D) Working with real estate professionals

B) Personal observation

When it comes to real estate investments, "commercial" is ______. A) An investment strategy B) A property type C) Both an investment strategy and a property type D) Neither an investment strategy nor a property type

C) Both an investment strategy and a property type

A neighborhood that has been disintegrating for some time is undergoing a rejuvenation, with several properties on one block being heavily renovated or entirely rebuilt. As a result, even the properties that are still old and shabby increase somewhat in value. This is the principle of ________. A) Anticipation B) Conformity C) Progression D) Regression

C) Progression

When a property's value is dropping because the neighboring property's yard is filled with trash, it's an example of ______. A) Depreciation B) Progression C) Regression D) Substitution

C) Regression

Richard recently inherited a substantial sum of money. He decided to invest the bulk of it in real estate because he can deduct certain costs from his profits. What's Richard's primary goal for this investment? A) Increase credit rating B) Profit C) Tax shelter D) To preserve capital

C) Tax shelter

A lender requests an appraisal of a property under foreclosure. What type of value is the lender most likely to be interested in? A) Going-concern value B) Insured value C) Investment value D) Liquidation value

D) Liquidation value

Which of the following statements regarding investments is true? A) In general, when an investor sells a property, it's likely to be for a lower price, because properties depreciate over time. B) Many investors choose real estate over other types of investments because real estate investments are virtually risk free, provided the investor follows the law. C) Only inexperienced investors consider real estate as a hedge against inflation, because property values typically decrease over time. D) Real estate investment is different from other investments because there's potential for earning income two different ways from the same investment.

D) Real estate investment is different from other investments because there's potential for earning income two different ways from the same investment.

What type of information about real estate market trends can be obtained by simply driving through a neighborhood where an investor owns or is considering the purchase of property? A) Cap rates B) Market rents C) Net operating income D) Vacancies and new construction

D) Vacancies and new construction

Supply and demand determine competition within a market. Which of the following is a true statement? A) When there are fewer houses on the market, buyers will pay less. B) When there are fewer houses on the market, demand wanes, as well. C) When there are fewer houses on the market, neighborhood blight occurs. D) When there are fewer houses on the market, sellers can demand more for their properties.

D) When there are fewer houses on the market, sellers can demand more for their properties.

Which of the following government influences can affect value by restricting use of a property, perhaps even preventing the highest and best use of a property? A) Construction codes B) Federal control of money C) Taxes D) Zoning

D) Zoning