Final Quiz

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1. Reasons for buying income property usually does not include which of the following?
Short term appreciation
Monthly cash flow
Tax Shelter
Resale for quick profit

2. Reasons why you do not need a real estate agent to find a duplex for purchase include all except which of the following?
There is plenty of inventory available to the public
It is relatively easy to determine value
A commission will not be paid, so price will be lower
Obtaining financing is similar to your personal residence

3. A principal reason for using a real estate agent to find a 48-unit apartment building for purchase usually include which of the following?

Availability of many properties is known only to agents
An agent will insure that you obtain a good property
The expertise of an agent is necessary for analyzing value of the property
An agent can better fill out the purchase offer contract

4. The source of funds for the down payment that would probably be least objectionable to a lender is:
Second mortgage on your residence
Life insurance policy
Credit cards
Unsecured personal loan

5. Items required for a legal contract include which of the following?
Capacity of parties
Legal purpose
All of the above

6. Things to look for when analyzing a retail center built before 1978 include all except which of the following?
Options to renew or extend
Lead paint disclosure forms for each tenant
Limited liability tenants
Maintenance responsibilities

7. A very important benefit from maintaining good accounting records is which of the following?
Control of income and expenses
Protection against IRS audit
Easier financing
All of the above

8. The least troublesome event for property held in joint tenancy by two individuals is:
One of the owners gets divorced
One of the owners files bankruptcy
One of the owners dies
One of the owners decides he wants to sell

9. Which of the following would probably be of least concern when purchasing a 4th floor penthouse condominium built before 1978?
Lead-based paint

10. Advantages of investing in commercial properties (compared to residential) include all except which of the following?
Easier to get rid of bad tenants
Greater flexibility of lease terms
Usually provide greater cash flow
Usually dealing with more sophisticated tenants

11. Which of the following is a very important item on an application form?
License number of each vehicle
Emergency contacts
Bank accounts
All of the above

12. Advantages of investing in residential properties (compared to commercial) usually includes which of the following?
Greater flexibility of lease terms
Simpler lease agreements
Greater cash flow
Longer lease terms

13. Disadvantages of owning many small income properties include all except which of the following?
More bookkeeping & income tax return preparation
Higher operating costs per unit
Higher cost for outside management
Harder to finance

14. Which of the following inspections/reports are usually most likely to be required by the lender for a commercial property?
Lead-based paint
Phase 1

15. Written contracts are required for purchase of real estate due to which of the following?
Statute of Frauds
Supreme Court decision
Dept. of Real Estate regulation
National Association of Realtors Code of Ethics

16. The most important thing regarding your purchase offer is:
Low price
Early closing

17. The following are always exempt from federal lead paint law except which one?
Senior housing
Short-term vacation rentals
A single rented room in a house
Housing certified as lead-free

18. The purpose of an Estoppel Certificate is:
Stop tenant from remodeling his unit
Stop landlord from entering the unit without 24 hours notice
Stop tenant from claiming lease terms outside the lease agreement
Stop contractors from filing liens against the property

19. The most important factor determining the value of a commercial property is:
Vacancy factor

20.Which of the following statements are true regarding Mortgages and Trust Deeds?
The borrower is called Mortgagee
The lender is called Trustee
The borrower is called Beneficiary
None of the above

21.Which statement is true for a rental house when the first qualified applicant is in a wheel chair?
The landlord can refuse to rent to an applicant in a wheel chair because the house does not have wheel chair access
The manager can refuse to rent to a blind applicant with a seeing-eye dog because the landlord has a strict no-pets policy that is applied to all applicants