Ch. 12 investing other broker related fields

real estate

1. The number one objective for investing in real estate is:

a. to keep busy.

b. to make money.

c. to save the environment.

d. respect.

b. to make money.

2. Commercial banks make the majority of their funds available for

a. high interest loans.

b. short term loans.

c. credit cards, automobile, and construction loans.

d. all answers are correct.

d. all answers are correct.

Income generated from an income property, minus the expenses associated with it, is known as:

a. cash flow.

b. appreciation.

c. expense floating.

d. political income.

a. cash flow.

The total gross income a property is capable of producing at full occupancy, without any deductions for expenses, is:

a. probable gross income.

b. potential gross income.

c. present gross income.

d. all answers are correct.

b. potential gross income.

For income tax purposes, which of the following are NOT considered operating expenses?

a. loan payments
b. depreciation allowances
c. income tax provisions
d. all of the above.

d. all of the above.

Which of the following is a category of operating expense for appraisal purposes?

a. Fixed expenses

b. Variable expenses

c. Reserves for replacement

d. All answers are correct

d. All answers are correct

Which of the following are operating expenses that DO vary (variable expenses)?

a. Utility costs

b. Property management fees

c. Cleaning and maintenance fees

d. All answers are correct

d. All answers are correct

Investors are looking for low (or reasonable) times gross of eight or less. The higher the gross multiplier:

a. the higher the price.

b. the lower the price.

c. the harder it is to sell the property.

d. the more expensive it is to appraise.

a. the higher the price.

The net operating income is divided by the selling price to determine the appropriate:

a. rental capacity.

b. capitalization (CAP) rate.

c. substitution rate.

d. APR.

b. capitalization (CAP) rate.

 An association of two or more people combining their financial resources for the purposes of achieving one or more investment objectives is called:

a. a syndication.

b. hypothecation.

c. an investment shelter.

d. a synthication.

a. a syndication.

n buying income-producing property, greater emphasis is placed on:

a. financial benefits.
b. sentimental attachments.
c. aesthetics.
d. political climate.

a. financial benefits.

Operating expenses DO NOT include:

a. loan payments.
b. depreciation allowances.
c. income tax provisions.
d. all of the above.

d. all of the above.

A Subchapter S Corporation is taxed:

a. only once.
b. twice.
c. unlimited times.
d. none of the above.

a. only once.

The most preferred form of legal organization is:

a. general partnership.
b. limited partnership.
c. unlimited partnership.
d. none of the above

b. limited partnership.

 REIT stands for:

a. Real Estate Investment Trust.
b. Real Estate Interim Trust.
c. Real Equity Interest Trust.
d. none of the above.

a. Real Estate Investment Trust.

A business opportunity sale can include:

a. the sale of a business.
b. the lease of a business.
c. the goodwill of a business.
d. all of the above.

d. all of the above.

 In a bulk sale, the transferee refers to the:

a. seller.
b. buyer.
c. broker.
d. none of the above.

b. buyer.

Which of the following is filed with the Secretary of State in California?

a. The Financing Statement
b. The Security Agreement
c. Both a and b
d. None of the above

a. The Financing Statement

A seller's permit is secured from the:

a. State Board of Equality.
b. State Board of Equalization.
c. Federal Board of Real Estate Sales.
d. all of the above.

b. State Board of Equalization.

 The bill of sale serves the same function in the transfer of personal property as:

a. the grant deed does for real property.
b. the grant deed does for personal property.
c. the lease does for real property.
d. none of the above.

a. the grant deed does for real property.

. An agreement where the seller of a business agrees to not open a competing business for a period of time within a specific geographical area is referred to as:

a. an agreement to recluse oneself.
b. an agreement to withdraw.
c. A covenant not to compete.
d. none of the above.

c. A covenant not to compete.

The term RPSD stands for:

a. Real Property Securities Dealer.
b. Real Property Substandard Department
c. Real Property Securities Division.
d. none of the above.

a. Real Property Securities Dealer.

Before selling real property securities to the public, the broker must obtain a permit from the:

a. Governor.
b. California Bureau of Real Estate.
c. State Franchise Board.
d. all of the above.

b. California Bureau of Real Estate.

A syndicate can be a:

a. corporation.
b. partnership.
c. trust.
d. all of the above.

d. all of the above.

. The broker's broker or consultant is one way to describe the:

a. Real Estate Investment Counselor.
b. Real Estate Commissioner.
c. Escrow Officer.
d. none of the above.

a. Real Estate Investment Counselor.