UGA REAL 4000 EXAM 4 Dietz |84 Q’s and
A’s (Chapters 17, 19, 21, 23)
ways to pool equity - --General partnership
-Limited partnership
-C corporation
-S corporation
-Limited liability company (LLC)
-Tenancy-in-common
-REIT
- tenant reps - -brokers or agents that specialize in helping tenants find
suitable space to lease
- credit tenants - -Companies whose general debt obligations are rated
"investment grade" by one or more of the U.S. rating agencies, such as
Standard and Poor's and Moody's.
- permanence potential - -the preference to lease residential units to
households whose prior history indicates a probability of a long-term
occupancy
- tenant mix - -the synergism created by the cur- rent collection of tenants.
Simply stated, means that with the right mix of ten- ants "the whole can be
greater than the sum of its parts."
- custodial maintenance - -The day-to-day cleaning and upkeep required to
maintain property value and tenants.
- Corrective Maintenance - -is the ordinary repairs to a building and its
equipment on a day-to-day basis. Examples include fixing a leaking roof,
repairing a broken window, painting, stripping and refinishing a floor, and
other routine tasks.
- preventive maintenance - -is a program of regular inspections and care to
avert potential problems.
- Deferred Maintenance - -is ordinary custodial or corrective maintenance
not performed at the time a problem is detected.
- management agreement - -The agreement that forms the basis for the
relationship between the property owner and the property management firm.
, - Agency relationship - -A relationship that empowers the property
manager/agent to serve as the owner's fiduciary; thus, the manager's words
and actions are binding on the owner.
- benchmark - -a reference point that can be used as a standard to quantify
the relative performance of an asset manager (an agent) on behalf of an
investor (a principal).
- Rehabilitation - -is the restoration of a property to satisfactory condition
without changing the floor plan, form, or style of the structure. _____ removes
the effects of prolonged under maintenance, and may involve painting,
replacement of a roof, replastering, or replacement of deteriorated portions
of the building.
- remodeling - -changes the floor plan, form, or style of a structure to
correct functional or economic deficiencies. ______ may rearrange partitions
to alter a floor plan, or it may replace obsolete electrical, plumbing, and
heating systems.
- adaptive reuse - -a conversion in which the remodeling produces a
creative reuse of the structure that is different from its original purpose.
- advantages of pooling equity - --allows investors to purchase an interest in
larger properties
-diversification of portfolio
-economies of sale in acquisitions, management and disposition
-access to cheaper debt capital
-expertise of management team hired by syndicator/ organizer
- disadvantages of pooling equity - --often must relinquish management
control to active manager
-must compensate sponsor with fees, salary, and/or disproportionate share
of equity ownership
- Direct Investment - --gives the individual & institutional investors
complete control
-but...investor must supply the expertise
-no liquidity
-as size of investor's portfolio increase, its easier to diversify risk, create
liquidity across assets, retain in-house experts or hire consultants
- General Partnership - --treated as conduits for tax purposes (don't face
"double taxation")
-easily created
-partners make all operating decisions
- all partners have unlimited liability (which makes it uncommon)
A’s (Chapters 17, 19, 21, 23)
ways to pool equity - --General partnership
-Limited partnership
-C corporation
-S corporation
-Limited liability company (LLC)
-Tenancy-in-common
-REIT
- tenant reps - -brokers or agents that specialize in helping tenants find
suitable space to lease
- credit tenants - -Companies whose general debt obligations are rated
"investment grade" by one or more of the U.S. rating agencies, such as
Standard and Poor's and Moody's.
- permanence potential - -the preference to lease residential units to
households whose prior history indicates a probability of a long-term
occupancy
- tenant mix - -the synergism created by the cur- rent collection of tenants.
Simply stated, means that with the right mix of ten- ants "the whole can be
greater than the sum of its parts."
- custodial maintenance - -The day-to-day cleaning and upkeep required to
maintain property value and tenants.
- Corrective Maintenance - -is the ordinary repairs to a building and its
equipment on a day-to-day basis. Examples include fixing a leaking roof,
repairing a broken window, painting, stripping and refinishing a floor, and
other routine tasks.
- preventive maintenance - -is a program of regular inspections and care to
avert potential problems.
- Deferred Maintenance - -is ordinary custodial or corrective maintenance
not performed at the time a problem is detected.
- management agreement - -The agreement that forms the basis for the
relationship between the property owner and the property management firm.
, - Agency relationship - -A relationship that empowers the property
manager/agent to serve as the owner's fiduciary; thus, the manager's words
and actions are binding on the owner.
- benchmark - -a reference point that can be used as a standard to quantify
the relative performance of an asset manager (an agent) on behalf of an
investor (a principal).
- Rehabilitation - -is the restoration of a property to satisfactory condition
without changing the floor plan, form, or style of the structure. _____ removes
the effects of prolonged under maintenance, and may involve painting,
replacement of a roof, replastering, or replacement of deteriorated portions
of the building.
- remodeling - -changes the floor plan, form, or style of a structure to
correct functional or economic deficiencies. ______ may rearrange partitions
to alter a floor plan, or it may replace obsolete electrical, plumbing, and
heating systems.
- adaptive reuse - -a conversion in which the remodeling produces a
creative reuse of the structure that is different from its original purpose.
- advantages of pooling equity - --allows investors to purchase an interest in
larger properties
-diversification of portfolio
-economies of sale in acquisitions, management and disposition
-access to cheaper debt capital
-expertise of management team hired by syndicator/ organizer
- disadvantages of pooling equity - --often must relinquish management
control to active manager
-must compensate sponsor with fees, salary, and/or disproportionate share
of equity ownership
- Direct Investment - --gives the individual & institutional investors
complete control
-but...investor must supply the expertise
-no liquidity
-as size of investor's portfolio increase, its easier to diversify risk, create
liquidity across assets, retain in-house experts or hire consultants
- General Partnership - --treated as conduits for tax purposes (don't face
"double taxation")
-easily created
-partners make all operating decisions
- all partners have unlimited liability (which makes it uncommon)
