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TEXAS REAL ESTATE INVESTMENT EXAM ACTUAL
EXAM 250 QUESTIONS AND CORRECT DETAILED
ANSWERS (VERIFIED AND CORRECT ANSWERS)
|ALREADY GRADED A
Which of the following Real Estate Investment Trusts focus on lending money for
mortgages and investing in mortgage-backed securities?
Equity REIT
Investment REIT
Mortgage REIT
Security REIT - (answers)Equity REIT
(In this type of partnership, non-general partners are limited in their authority.)
In this type of partnership, non-general partners are limited in their authority.
Liability partnership
Limited partnership
LLC partnership
S-corporation partnership - (answers)Limited Partnership
(In a limited partnership, limited partners have less risk and less authority.)
Ezra has filed a fair housing discrimination complaint against an investor. HUD is
investigating. Within how many days of receiving the complaint does HUD have to
respond?
100
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30
60
90 - (answers)100
(Within 100 days of receiving the compliant, HUD will investigate and determine
whether reasonable cause exists to bring a charge of illegal discrimination against
the alleged offender, or it will dismiss the case.)
What's the name of the tax program that requires a withholding of a portion of
the gross purchase price when foreign owners of real estate in the U.S. sell that
property?
Foreign Investment in Real Estate Property Tax Act (FIRPTA)
Foreign Investor Real Estate Investment Tax (FIRE-IT)
Foreign Real Estate Tax Withholding Act (FRETWA)
Tax Withholding for Foreign Holding Act (TWFHA) - (answers)Foreign Investment
in Real Estate Property Tax Act (FIRPTA)
Who's the mortgagor in a mortgage?
Borrower
Lender
Trustee
Trustor - (answers)Borrower
(Plain English for the mortgagor is "borrower." This is because the borrower
establishes the mortgage as a security instrument for the loan.)
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When a borrower has paid off the loan, how is the release handled if the security
instrument is a mortgage?
The lender executes and records a deed of reconveyance and returns the note to
the borrower.
The lender executes and records a satisfaction of mortgage and returns the note
to the borrower.
The lender files for a release of lien and returns the note to the borrower.
The lender returns the note and mortgage to the borrower. - (answers)The lender
executes and records a satisfaction of mortgage and returns the note to the
borrower.
(When a borrower has paid the loan in full, it's the lender's responsibility to
execute and record a satisfaction of mortgage.)
During the option period to renew a lease, who determines whether the option
will be exercised?
Either the landlord or the tenant can make the decision.
It must be mutually agreed to by both the landlord and the tenant.
The landlord makes the decision.
The tenant makes the decision. - (answers)The tenant makes the decision.
(When there's an option period in play, the lease can be renewed at the sole
discretion of the tenant. The landlord has no say in whether the option will be
exercised (or not).)
Which payment plan consists of the borrower paying a constant amount made up
of principal and interest on a periodic basis (usually monthly)?
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The lender returns the note and mortgage to the borrower.
Flexible payment plan
Fully amortized loan payment plan
Interest-only payment plan
Partially amortized payment plan - (answers)Fully amortized loan payment plan
(Over time, more of the payment goes toward the principal, and less toward the
interest. By the end of the loan, the payment goes almost entirely toward the
loan's principal.)
Charlie, who owns and leases out a commercial building, pays taxes,
maintenance, and insurance on the building. What type of lease agreement does
Charlie have with his tenants?
Gross
Net
Percentage
Triple net - (answers)Gross
(With gross leases, the landlord typically pays all expenses, such as taxes,
maintenance, and insurance.)
This is the part of Eileen's job that she enjoys the least: Telling tenants they have
to leave because they've failed to comply with the terms of their lease. Which
commercial property manager duty is Eileen having to perform?
Collecting rent
Evicting tenants
TEXAS REAL ESTATE INVESTMENT EXAM ACTUAL
EXAM 250 QUESTIONS AND CORRECT DETAILED
ANSWERS (VERIFIED AND CORRECT ANSWERS)
|ALREADY GRADED A
Which of the following Real Estate Investment Trusts focus on lending money for
mortgages and investing in mortgage-backed securities?
Equity REIT
Investment REIT
Mortgage REIT
Security REIT - (answers)Equity REIT
(In this type of partnership, non-general partners are limited in their authority.)
In this type of partnership, non-general partners are limited in their authority.
Liability partnership
Limited partnership
LLC partnership
S-corporation partnership - (answers)Limited Partnership
(In a limited partnership, limited partners have less risk and less authority.)
Ezra has filed a fair housing discrimination complaint against an investor. HUD is
investigating. Within how many days of receiving the complaint does HUD have to
respond?
100
,2|Page
30
60
90 - (answers)100
(Within 100 days of receiving the compliant, HUD will investigate and determine
whether reasonable cause exists to bring a charge of illegal discrimination against
the alleged offender, or it will dismiss the case.)
What's the name of the tax program that requires a withholding of a portion of
the gross purchase price when foreign owners of real estate in the U.S. sell that
property?
Foreign Investment in Real Estate Property Tax Act (FIRPTA)
Foreign Investor Real Estate Investment Tax (FIRE-IT)
Foreign Real Estate Tax Withholding Act (FRETWA)
Tax Withholding for Foreign Holding Act (TWFHA) - (answers)Foreign Investment
in Real Estate Property Tax Act (FIRPTA)
Who's the mortgagor in a mortgage?
Borrower
Lender
Trustee
Trustor - (answers)Borrower
(Plain English for the mortgagor is "borrower." This is because the borrower
establishes the mortgage as a security instrument for the loan.)
,3|Page
When a borrower has paid off the loan, how is the release handled if the security
instrument is a mortgage?
The lender executes and records a deed of reconveyance and returns the note to
the borrower.
The lender executes and records a satisfaction of mortgage and returns the note
to the borrower.
The lender files for a release of lien and returns the note to the borrower.
The lender returns the note and mortgage to the borrower. - (answers)The lender
executes and records a satisfaction of mortgage and returns the note to the
borrower.
(When a borrower has paid the loan in full, it's the lender's responsibility to
execute and record a satisfaction of mortgage.)
During the option period to renew a lease, who determines whether the option
will be exercised?
Either the landlord or the tenant can make the decision.
It must be mutually agreed to by both the landlord and the tenant.
The landlord makes the decision.
The tenant makes the decision. - (answers)The tenant makes the decision.
(When there's an option period in play, the lease can be renewed at the sole
discretion of the tenant. The landlord has no say in whether the option will be
exercised (or not).)
Which payment plan consists of the borrower paying a constant amount made up
of principal and interest on a periodic basis (usually monthly)?
, 4|Page
The lender returns the note and mortgage to the borrower.
Flexible payment plan
Fully amortized loan payment plan
Interest-only payment plan
Partially amortized payment plan - (answers)Fully amortized loan payment plan
(Over time, more of the payment goes toward the principal, and less toward the
interest. By the end of the loan, the payment goes almost entirely toward the
loan's principal.)
Charlie, who owns and leases out a commercial building, pays taxes,
maintenance, and insurance on the building. What type of lease agreement does
Charlie have with his tenants?
Gross
Net
Percentage
Triple net - (answers)Gross
(With gross leases, the landlord typically pays all expenses, such as taxes,
maintenance, and insurance.)
This is the part of Eileen's job that she enjoys the least: Telling tenants they have
to leave because they've failed to comply with the terms of their lease. Which
commercial property manager duty is Eileen having to perform?
Collecting rent
Evicting tenants
