Ree 3043 final exam review questions with ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
verified detailed answers ||\\//|| ||\\//||
Due-on-sales clauses are included in commercial mortgages primarily to protect lenders ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
from: - correct answer✔✔Default Risk
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Consider a 30-year, 7%, fixed rate, fully amortizing mortgage with a yield maintence
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
provision. Relative to this mortgage, a 10-year balloon mortgage with the same interest rate
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
and yield maintenance provisions will primarily reduce the lender's: - correct
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
answer✔✔Interest rate risk ||\\//|| ||\\//||
Lockout provisions are primarily intended to reduce the lender's: - correct
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
answer✔✔Reinvestment risk ||\\//||
The tax-benefits associated with installment sales are: - correct answer✔✔Captured
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
exclusively by the seller ||\\//|| ||\\//|| ||\\//||
Which of the following statements is most accurate? - correct answer✔✔Joint ventures
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
usually decrease the amount of equity capital the developer/borrower must invest in the
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project
Which of the following financing structures provides for 100% financing? - correct
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
answer✔✔Complete (land and building) sale-leaseback ||\\//|| ||\\//|| ||\\//|| ||\\//||
Using financial leverage on a real estate investment can be for the purpose of all of the
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
following except: - correct answer✔✔Reduction of financial risk for the leveraged
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investment
, Which of these ratios is an indicator of the financial risk for an income property? - correct
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answer✔✔Both a and b, but not c ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
If the property's NOI is expected to be $22,560 operating expenses $12,250, and the debt
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service $19,987, the debt coverage ratio (DCR) is approximately equal to: - correct
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
answer✔✔1.13
With a mezzanine loan: - correct answer✔✔the borrower's promise to pay is secured by the
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
equity interest in the borrower's limited partnership or limited liability company.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Double taxation is most likely to occur if the commercial properties are held in the form of
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
a: - correct answer✔✔C Corporation
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With regard to double taxation, distributions, and the treatment of the losses, general
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
partnerships are most like: - correct answer✔✔Limited partnerships ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Special allocations of income or loss are avaliable if the form of ownership is a: - correct
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
answer✔✔Limited partnership ||\\//||
Real estate syndicates traditionally have been legally organized most frequently as: - correct
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
answer✔✔Limited partnerships ||\\//||
A real estate investment trust generally: - correct answer✔✔none of the above
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Which of the following forms of ownership involve both limited and unlimited liability: -
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
correct answer✔✔Limited partnerships ||\\//|| ||\\//||
verified detailed answers ||\\//|| ||\\//||
Due-on-sales clauses are included in commercial mortgages primarily to protect lenders ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
from: - correct answer✔✔Default Risk
||\\//|| ||\\//|| ||\\//|| ||\\//||
Consider a 30-year, 7%, fixed rate, fully amortizing mortgage with a yield maintence
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
provision. Relative to this mortgage, a 10-year balloon mortgage with the same interest rate
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
and yield maintenance provisions will primarily reduce the lender's: - correct
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
answer✔✔Interest rate risk ||\\//|| ||\\//||
Lockout provisions are primarily intended to reduce the lender's: - correct
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
answer✔✔Reinvestment risk ||\\//||
The tax-benefits associated with installment sales are: - correct answer✔✔Captured
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
exclusively by the seller ||\\//|| ||\\//|| ||\\//||
Which of the following statements is most accurate? - correct answer✔✔Joint ventures
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
usually decrease the amount of equity capital the developer/borrower must invest in the
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
project
Which of the following financing structures provides for 100% financing? - correct
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
answer✔✔Complete (land and building) sale-leaseback ||\\//|| ||\\//|| ||\\//|| ||\\//||
Using financial leverage on a real estate investment can be for the purpose of all of the
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
following except: - correct answer✔✔Reduction of financial risk for the leveraged
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
investment
, Which of these ratios is an indicator of the financial risk for an income property? - correct
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
answer✔✔Both a and b, but not c ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
If the property's NOI is expected to be $22,560 operating expenses $12,250, and the debt
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
service $19,987, the debt coverage ratio (DCR) is approximately equal to: - correct
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
answer✔✔1.13
With a mezzanine loan: - correct answer✔✔the borrower's promise to pay is secured by the
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
equity interest in the borrower's limited partnership or limited liability company.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Double taxation is most likely to occur if the commercial properties are held in the form of
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
a: - correct answer✔✔C Corporation
||\\//|| ||\\//|| ||\\//|| ||\\//||
With regard to double taxation, distributions, and the treatment of the losses, general
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
partnerships are most like: - correct answer✔✔Limited partnerships ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Special allocations of income or loss are avaliable if the form of ownership is a: - correct
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
answer✔✔Limited partnership ||\\//||
Real estate syndicates traditionally have been legally organized most frequently as: - correct
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
answer✔✔Limited partnerships ||\\//||
A real estate investment trust generally: - correct answer✔✔none of the above
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Which of the following forms of ownership involve both limited and unlimited liability: -
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
correct answer✔✔Limited partnerships ||\\//|| ||\\//||
