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15 Cards in this Set
- Front
- Back
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The process of real estate investment analysis is important to an investor as it a. helps an investor select properties that meet personal objectives. b. determines the amount of taxes due on income-producing property. c. determines the exact cash flow from an investment property. d. makes possible the best use for a property based on zoning |
a |
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Fixed expenses typically include a. real estate taxes and hazard insurance. b. management fees and depreciation. c. utilities and repairs. d. mortgage payments and income taxes. |
a |
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Reserves for replacements a. are a cash expense. b. should not be considered in a residential income property. c. are used to pay for normal maintenance of the property. d. are a non-cash expense used to replace short-lived components that wear out from time to time. |
d
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The debt service coverage ratio a. is the primary indicator used by investors to indicate profitability. b. cannot be relied upon by lenders to measure their safety. c. is used by investors to indicate the occupancy level required to maintain operations. d. should typically be between 1.25 and 1.3. |
d |
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What type of risk is caused by changes in general business conditions? a. dynamic b. operating c. capital d. static |
a |
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If an investor earns a lower rate of return on capital invested than the rate paid on borrowed funds, what type of leverage is indicated? a. positive b. neutral c. negative d. cumbersome |
c |
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What is used to determine the level of occupancy required to pay the operating expenses of an income-producing property? a. yield ratio b. cash break-even ratio c. equity dividend ratio d. operating expense ratio |
b |
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When estimating the value of a business, which item is NOT relevant? a. personal property owned b. short-term liabilities c. business goodwill d. personal income taxes |
d |
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Which document indicates the financial condition of a business as of a particular time? a. operating statement b. profit and loss sstatement c. balance sheet d. bank statement |
c |
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Business brokerage a. should not be conducted by real estate licensees. b. cannot be conducted by real estate licensees unless they also possess a mortgage broker's license. c. consists primarily of analyzing financial statements. d. would rarely involve securities transactions. |
c |
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Real estate licensees that are engaged in business brokerage might need to have a securities license if the transaction involves a. negotiation of a new mortgage loan. b. an analysis of financial statements. c. renegotiation of an existing lease. d. transferring shares of stock or minited partnership interests. |
d |
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The document used to secure financing of personal property under the Uniform Commercial Code is a a. deed b. bill of sale c. security agreement d. trust agreement |
c |
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The assets of a business do NOT include a. goodwill b. notes payable c. accounts receivable d. furniture and equipment. |
b |
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Which document most closely resembles a deed? a. Bill of Sale b. Security Agreement c. balance sheet d. operating statement |
a |
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The use of "by-bidders" in the auctioning of property is a. a common practice b. required under F.S. 475 c. not allowed d. used in the sale of personal property only. |
c |
