Final Quiz

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Quiz Score out of 25
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
Consideration
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?
Radon
Termites
 Lead-based paint
 Asbestos
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
Termite
 Phase 1
Radon
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
Contingencies
Vesting
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:
Age
 NOI
Vacancy factor
Zoning
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