TEXAS REAL ESTATE INVESTMENT EXAM 2023-2024
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? – ANSWERDynamic
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
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? – ANSWERThe EPA can seek damages in court for up to three times the actual
cleanup costs.
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 incomeproducing 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.