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24 | |
When a community requires a property owner to pay to improve existing public infrastructure in order to obtain a building permit, this is a result of ? |
| | A) | an impact fee being imposed |
| | B) | the required building permit being collected |
| | C) | a form of tax shelter being created |
| | D) | evidence that the property met currency |
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25 | |
Many investors argue that paying impact fees is a form of? |
| | A) | a building restriction |
| | B) | bureaucratic paperwork |
| | C) | a property tax not equally distributed to all property owners |
| | D) | all of the above |
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26 | |
Which of the following is necessary to calculate a taxable gain in the event of a sale? |
| | A) | Any depreciation taken over the ownership life |
| | B) | The property basis |
| | C) | The amount realized by the seller in a sale |
| | D) | All the above |
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27 | |
Which of the following can cause property values to increase over a very short period of time? |
| | A) | Widen existing highways to allow more traffic |
| | B) | Open up new areas by building a bridge |
| | C) | Change the use of an apartment building to medical offices |
| | D) | All of the above |
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28 | |
The key to getting the most out of market conditions is to understand the big picture and to concentrate on? |
| | A) | economic conversions |
| | B) | finding the highest and best use of a property |
| | C) | developing a comfort zone |
| | D) | becoming a real estate investor |
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29 | |
Changes in property values following development of new roadways can be anticipated because? |
| | A) | there is a long lead time before the work is started |
| | B) | past examples in similar communities can be studied |
| | C) | a change from any status quo can have a ripple effect |
| | D) | all of the above |
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30 | |
What are the three things property owners can do to increase value of their property over which they have direct control? |
| | A) | Voluntary change, increased bottom line, and new buildings |
| | B) | New zoning, higher rents, and remodeling the structure |
| | C) | Repainted building, reduced operating expenses, establish new management |
| | D) | All the above |
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31 | |
The development of new public facilities will always have a positive effect on the property values in a community: |
| | A) | True |
| | B) | False |
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32 | |
A temporary traffic detour while new road work is underway can present the real estate investor with? |
| | A) | investment opportunity |
| | B) | reduced rent during and after the detour |
| | C) | future value change, which could be up or down |
| | D) | all the above |
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33 | |
The attitude of a community toward real estate development is not that important to the real estate investor because it affects all values equally: |
| | A) | True |
| | B) | False |
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34 | |
“Tight money” can bring new construction to a halt and can therefore prevent the market from becoming overbuilt: |
| | A) | True |
| | B) | False |
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35 | |
What would be the most likely result if no reasonable long-term financing was available to finance real estate development? |
| | A) | A demand for existing property would result and all property values would go up |
| | B) | The market would stagnate with buyers unable to finance their acquisitions, and property values could go down |
| | C) | Lenders would step in to provide the needed long-term financing |
| | D) | Both a and b above |
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36 | |
Which property represents the best opportunity for a future profit with minimal capital improvements? |
| | A) | A brand new duplex apartment in a good area |
| | B) | A nice average priced home for a good area that has been neglected for at least two years |
| | C) | A tract of land in the path of a highway to be built in four or five years |
| | D) | A restaurant that has been closed for four months because the owner died |
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37 | |
When a seller has an urgency to sell, which is the best technique to sell a difficult property? |
| | A) | Reduce the price until a buyer comes along |
| | B) | Offer the buyer a “nothing down” deal |
| | C) | Consider becoming an aggressive buyer and work an exchange into another property |
| | D) | Place the property up for auction |
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38 | |
The elements that give property value can best be described as? |
| | A) | the location, location, location |
| | B) | the importance of the location to the user and the use allowed |
| | C) | the access, traffic flow, and the use allowed |
| | D) | a far corner, prime traffic flow, zoning, and good setbacks |
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39 | |
Which of the following is an example of a potential hidden cost when buying property? |
| | A) | A zoning violation |
| | B) | A future impact fee |
| | C) | All of the above |
| | D) | None of the above |
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40 | |
A fast food operator looking for a location would select which of the following sites to build a restaurant (assume the price to be the same per square foot for each): |
| | A) | A near corner with good traffic access for all traffic |
| | B) | A far corner with traffic access from the secondary street only |
| | C) | A “middle of the block” site at the main entrance to a major shopping center |
| | D) | A far corner with great traffic access at an intersection that is soon to undergo major improvement which may triple the traffic |
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41 | |
Where would you go to find out the number of cars that travel in front of a business location you are considering buying? |
| | A) | The local community building department |
| | B) | The Federal offices of the DOT |
| | C) | The highest authority DOT in control of the road |
| | D) | A local road construction company |
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42 | |
The amount of residential units a community will allow in any area may be limited by? |
| | A) | zoning floor area ratio rules |
| | B) | setbacks |
| | C) | road access |
| | D) | all of the above |
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43 | |
All property line encroachments can be seen if you know where the property boundaries are: |
| | A) | True |
| | B) | False |
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44 | |
Which of the following changes in rules or regulations can a community require the existing property owner to adjust to? |
| | A) | Number of units allowed per acre |
| | B) | Setbacks |
| | C) | Fire rules |
| | D) | None of the above |
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45 | |
When a property owner has an allowed use in a building that is “grandfathered in” due to building code changes and the building burns down, which of the following would most likely apply? |
| | A) | The property could be reconstructed as it was |
| | B) | The new building would have to meet all new codes |
| | C) | The owner could find a compromise with the building department |
| | D) | A rezoning would be the first step for the property owner to take to ensure the use would not be changed |
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46 | |
When dealing with a motivated seller the most important thing for the buyer to know is? |
| | A) | how low a price the seller will take |
| | B) | what the seller knows about the property |
| | C) | whether the seller is close to foreclosure |
| | D) | the primary goal the seller wants to achieve |
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47 | |
One of the best ways to maximize the effect of economic conversions is to? |
| | A) | fill a community need |
| | B) | buy a run-down property you can fix up |
| | C) | always look for property you can rezone |
| | D) | close a right-of-way to tie up the property |
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48 | |
Baking bread or chocolate chip cookies during an open house of a property you are trying to sell may have the effect of? |
| | A) | taking your mind off the real job of selling the house |
| | B) | evoking pleasant memories of prospective buyers |
| | C) | doing nothing to remove “dog smell” |
| | D) | none of the above |
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Andrea is looking at an eight-unit apartment house. The rents average $500 per month. According to the norms for the area the building should experience no more than 6 percent vacancy factor for the year, and operating costs not to exceed 30 percent the gross possible rent.
Part 4: How to Buy Establishes How You Profit in Real Estate Investing (Chapters 17 through 20)
Frank offered to paint the exterior of Jim’s apartment building in exchange for one year’s rent in a vacant apartment in the same building.
Janet wants to exchange a vacant tract of land she owns that is worth $150,000 and is free and clear of all debt. She offers this property for Cliff’s apartment building that he has on the market for $600,000. In Janet’s offer she agrees to assume the existing debt of $300,000.
Janet wants to exchange a vacant tract of land she owns that is worth $150,000 and is free and clear of all debt. She offers this property for Cliff’s apartment building that he has on the market for $600,000. In Janet’s offer she agrees to assume the existing debt of $300,000.
Janet wants to exchange a vacant tract of land she owns that is worth $150,000 and is free and clear of all debt. She offers this property for Cliff’s apartment building that he has on the market for $600,000. In Janet’s offer she agrees to assume the existing debt of $300,000.
Janet wants to exchange a vacant tract of land she owns that is worth $150,000 and is free and clear of all debt. She offers this property for Cliff’s apartment building that he has on the market for $600,000. In Janet’s offer she agrees to assume the existing debt of $300,000.
Janet wants to exchange a vacant tract of land she owns that is worth $150,000 and is free and clear of all debt. She offers this property for Cliff’s apartment building that he has on the market for $600,000. In Janet’s offer she agrees to assume the existing debt of $300,000.
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76 | |
Which of the choices below best describes a situation in which the seller takes $15,000 credit for legal services as part of a transaction to dispose of a $300,000 property he or she owns? |
| | A) | The “G” syndrome |
| | B) | A discounted sale |
| | C) | A non-1031 exchange |
| | D) | An accommodation move |
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77 | |
Any mortgage with a provision that indicates that the mortgage can be assumed subject to the existing lenders approval is a fully assumable mortgage: |
| | A) | True |
| | B) | False |
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78 | |
A buyer’s broker is any real estate agent that the buyer is dealing with and means the seller has a separate broker: |
| | A) | True |
| | B) | False |
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79 | |
Any offer that is titled Letter of Intent is not a binding agreement: |
| | A) | True |
| | B) | False |
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80 | |
One of the best ways to learn about the other party to an agreement is to? |
| | A) | have the listing broker tell you about them |
| | B) | ask neighbors about them |
| | C) | meet them at their home |
| | D) | do a deed search on all the property they own |
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81 | |
What is the best way to avoid having a seller fail to negotiate with you because they are insulted at your initial low offer? |
| | A) | Tell them they must be really angry at all the people who didn’t even make an offer |
| | B) | Have a real estate agent who can absorb the frustrations of the seller |
| | C) | Wait awhile and make an even lower offer if the property is still on the market |
| | D) | Move on to another property and a more cooperative seller |
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82 | |
The mortgage that has an amortization clause that reads, “The mortgage shall be paid in 11 equal annual installments of principal together with interest on the unpaid balance at 9 percent per annum” would have an annual payment at the end of the fourth year of ? (assume the original loan was $110,000). |
| | A) | $19,000.00 |
| | B) | $17,990.00 |
| | C) | $19,900.00 |
| | D) | None of the above |
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83 | |
A mortgage that has more than one property as security is best called? |
| | A) | a subordinated mortgage |
| | B) | a wraparound mortgage |
| | C) | a blanket mortgage |
| | D) | a mixed mortgage |
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84 | |
If the seller allows the buyer to assume the existing financing and the existing lender agrees, and the seller takes back a secondary mortgage on the property, which of the following best describes that event? |
| | A) | A blanket second mortgage |
| | B) | A subordinated mortgage |
| | C) | A wraparound mortgage |
| | D) | A purchase money second mortgage |
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85 | |
When a wraparound mortgage can be used, it may have the following effect? |
| | A) | To provide better security to the seller than a regular second mortgage |
| | B) | To allow the seller to leverage over existing financing |
| | C) | To give the buyer better terms than available in the institutional market |
| | D) | All the above |
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86 | |
A mortgage with an original loan amount of $120,000 at 10 percent interest per year that was scheduled to be paid off at the end of the tenth year that had as the 15th monthly payment $947.00 could best be described as? |
| | A) | an ARM mortgage |
| | B) | equal installment mortgage |
| | C) | a balloon mortgage |
| | D) | a deficit payment mortgage |
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87 | |
The best way to deal with lenders is? |
| | A) | to get to know the secretary to the president |
| | B) | to spend a lot of time with one of their loan officers |
| | C) | to get to know them and bring them projects they like to loan on |
| | D) | a and b of the above |
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