WALL STREET PREP REAL ESTATE
TECHNICALS EXAM WITH CORRECT
SOLUTIONS
1. What are the different types of real estate firms? - ANSWER-
REPE, REITs, RE development, RE investment management, RE
operating companies, RE brokerage
2. REPE - ANSWER-raise capital from the funds LPs to invest in RE
(buy, develop, manage, sell)
3. REITs - ANSWER-own portfolio of income generating RE assets.
90% of taxable income must be paid in dividends. Most are
publicly traded
4. RE development - ANSWER-construct properties from scratch.
Lifecycle of property is longer than other types of RE firms
5. REIM - ANSWER-raise capital from LPs to acquire, develop, and
manage to then sell them for a profit. Different from REPE bc
funds have no end date
6. RE operating companies - ANSWER-Similar to REITs but have to
reinvest earnings, not pay out dividends. If they don't, they are
subject to double taxation at firm and shareholder level
7. RE brokerage - ANSWER-intermediaries that facilitate
transaction on both sides (buy/sell/lease). Identify opportunities
to buy/sell on behalf of client or negotiate lease terms as a
representative.
, 8. What are the different property classes in real estate investing?
- ANSWER-Class A, B, C, D
9. Class A - ANSWER-premium modern properties in prime
locations with top of the line amenities. Lowest risk and lowest
return
10. Class B - ANSWER-slightly outdated but are built/renovated
with high quality construction and maintained well. Demand
comes from higher end middle class. Higher yield with upside
potential from investors.
11. Class C - ANSWER-Outdated (30+ years old) located in sub-
optimal areas. Conditions range from fair-poor and usually
require urgent repair/renovations. Tenants=low income/low
creditworthiness=higher risk=higher upside for investors.
12. Class D - ANSWER-Botton tier, distressed assets usually
located in areas with collapsing market demand (lowest rent,
high crime). Require a lot of spending on renovation. Most
investors avoid unless destressed assets specific investor.
13. What are the four main real estate investment strategies? -
ANSWER-core, core-plus, value add, opportunistic
14. Core - ANSWER-most conservative with least risk=low return
(class A). Appeal to investors who want stable/consistent
returns.
TECHNICALS EXAM WITH CORRECT
SOLUTIONS
1. What are the different types of real estate firms? - ANSWER-
REPE, REITs, RE development, RE investment management, RE
operating companies, RE brokerage
2. REPE - ANSWER-raise capital from the funds LPs to invest in RE
(buy, develop, manage, sell)
3. REITs - ANSWER-own portfolio of income generating RE assets.
90% of taxable income must be paid in dividends. Most are
publicly traded
4. RE development - ANSWER-construct properties from scratch.
Lifecycle of property is longer than other types of RE firms
5. REIM - ANSWER-raise capital from LPs to acquire, develop, and
manage to then sell them for a profit. Different from REPE bc
funds have no end date
6. RE operating companies - ANSWER-Similar to REITs but have to
reinvest earnings, not pay out dividends. If they don't, they are
subject to double taxation at firm and shareholder level
7. RE brokerage - ANSWER-intermediaries that facilitate
transaction on both sides (buy/sell/lease). Identify opportunities
to buy/sell on behalf of client or negotiate lease terms as a
representative.
, 8. What are the different property classes in real estate investing?
- ANSWER-Class A, B, C, D
9. Class A - ANSWER-premium modern properties in prime
locations with top of the line amenities. Lowest risk and lowest
return
10. Class B - ANSWER-slightly outdated but are built/renovated
with high quality construction and maintained well. Demand
comes from higher end middle class. Higher yield with upside
potential from investors.
11. Class C - ANSWER-Outdated (30+ years old) located in sub-
optimal areas. Conditions range from fair-poor and usually
require urgent repair/renovations. Tenants=low income/low
creditworthiness=higher risk=higher upside for investors.
12. Class D - ANSWER-Botton tier, distressed assets usually
located in areas with collapsing market demand (lowest rent,
high crime). Require a lot of spending on renovation. Most
investors avoid unless destressed assets specific investor.
13. What are the four main real estate investment strategies? -
ANSWER-core, core-plus, value add, opportunistic
14. Core - ANSWER-most conservative with least risk=low return
(class A). Appeal to investors who want stable/consistent
returns.
