TEXAS REAL ESTATE INVESTMENT EXAM -

TEXAS REAL ESTATE INVESTMENT EXAM -

ACTUAL EXAM 250 QUESTIONS AND CORRECT

DETAILED ANSWERS (VERIFIED AND CORRECT

ANSWERS) |ALREADY GRADED A

What do cooperative owners receive to demonstrate ownership? - ANSWER- Corporation shares and a proprietary lease

What does income shelter mean? - ANSWER- It means that the income received is sheltered from taxation.

Which of the following statements is a true statement about points paid by a borrower for refinancing? - ANSWER- If a portion of the amount refinanced is used to improve the home, points could be deductible

A group of investors bought property and developed a movie production studio. After a few years in business, the state passed regulations limiting the amount of tax incentives it would offer film studios shooting movies in the state. This move caused several companies to move their shooting to other states, jeopardizing the investors' ability to earn the return they were expecting. What type of risk is this? - ANSWER- Dynamic

Which of the following is a current trend in condominium investments? - ANSWER- Applying the condo format to other types of properties

Price levels are an indicator of _______. - ANSWER- Demand

What type of asset is held in a land trust? - ANSWER- Real estate

Lendright Home Loans asked a trustee to begin foreclosure proceedings as permitted by the power-of-sale clause in the security instrument. This 1 / 3

action does not need to involve the courts. What type of foreclosure process is being used? - ANSWER- Non-judicial foreclosure

Which type of real estate property can be divided into classes A, B, and C? - ANSWER- Office buildings

Which two numbers do you add to calculate maximum price? - ANSWER- Maximum equity and maximum loan

Who is the withholding agent under Foreign Investment in Real Property Tax Act? - ANSWER- The buyer

Which type of property lends itself more to farming and agriculture? - ANSWER- Large, flat acreage properties in rural communities

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

Property manager Cal has received three middle-of-the-night voice messages on his phone from the same tenant, Lin, who is furious with Cal's standard late rent fee. The late rent policy is spelled out in Lin's written lease. What should Cal do? - ANSWER- Talk to Lin as soon as possible, listen to his complaint, and help him understand that the fine is non-negotiable.

Sam and Monique knew that the old industrial site that they purchased needed some environmental cleanup, but they don't have the cash and put cleanup on hold. The EPA hired its own crew to deal with groundwater issues because of industrial solvents and billed Sam and Monique $164,000 when the job was complete. If Sam and Monique don't pay the bill, which of the following could happen? - ANSWER- The EPA can seek damages in court for up to three times the actual cleanup costs.

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Another name for a coupon bond, which is rarely issued anymore, is the _____bond. - ANSWER- Bearer

Cap rate is ______. - ANSWER- A way of quickly valuing income- producing properties in comparison to other properties

Vacancy rates in existing brick-and-mortar stores are around ______. -

ANSWER- 14%

Which organization manages a community's budget, zoning, and building code review, among other things? - ANSWER- Local planning board

Your tenant, Tom, has called to complain about a broken water heater.You hire someone to replace it. What type of maintenance are you performing? - ANSWER- Corrective

What's the name of the tax program that requires a withholding of a portion of the gross purchase price when foreign owners of real estate in the U.S. sell that property? - ANSWER- Foreign Investment in Real Estate Property Tax Act (FIRPTA)

A property valued at $500,000 is returning a net annual income of $45,000. What is the cap rate for this investment? - ANSWER- 9%

Which of the following statements describes an off-site residential property manager? - ANSWER- Supervises on-site personnel for multiple properties

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? - ANSWER- The economy headed into a recession.

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