Texas SAE Real Estate Investment
Texas SAE Real Estate Investment Exam
Study Guide Questions and Answers
2025
Which class of office building is aimed at tenants requiring functional space at below-
average rents for the area? -Correct Answer ✔Class C
Class C office buildings command below-average rates for the area. They're functional,
but not prestigious.
With a triple net lease, the tenant pays _______ separately from the base rent. -Correct
Answer ✔Taxes, insurance, and maintenance
When two very similar properties are for sale in the same neighborhood, which one will
sell first according to the principle of substitution? -Correct Answer ✔The lower priced
home
To protect themselves from liability, it's a good idea for property managers to ______. -
Correct Answer ✔Stay up to date on local landlord-tenant laws
According to the International Council for Shopping Centers, which commercial property
comprises only 1% of the retail industry? -Correct Answer ✔Factory outlet
Which payment plan consists of the borrower paying a constant amount made up of
principal and interest on a periodic basis (usually monthly)? -Correct Answer ✔Fully
amortized loan payment plan
Why are many middle-income cooperatives converted to condominiums? -Correct
Answer ✔To make resale easier
What type of lease is used most often with community shopping centers? -Correct
Answer ✔percentage
Property taxes generate approximately ______ of local government revenue. -Correct
Answer ✔one third (1/3)
Brittany has a small office in a professional building. She has a set monthly lease
payment that has been calculated to include maintenance of the common areas in the
building, such as the restroom and small kitchen, and all nets, utilities, and janitorial
charges for her space. The payment also includes taxes and insurance. The landlord
takes these payments and pays the individual expenses himself. What type of lease
does Brittany have? -Correct Answer ✔Gross lease
Texas SAE Real Estate Investment
,Texas SAE Real Estate Investment
Which of the following statements best describes the judicial foreclosure and sale
process? -Correct Answer ✔The lender must seek the court's permission to foreclose
on the property used as collateral for the loan.
What's compound interest? -Correct Answer ✔Interest that's reinvested into an account
that then earns interest
The owner's covenants and an insurance provision are included in which of the
following documents? -Correct Answer ✔Property management agreement
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? -
Correct Answer ✔Foreign Investment in Real Estate Property Tax Act (FIRPTA)
Jenner purchased his first home, to which he'll have access forever, as far as he knows.
Jenner owns ______. -Correct Answer ✔A freehold estate
What is the formal action to impose the property tax? -Correct Answer ✔levy
Which clause in a commercial lease determines how the tenant may use the space? -
Correct Answer ✔Use
The element of a deed that signifies the grantor's intention to transfer title to the grantee
is the ______. -Correct Answer ✔Act of conveyance
Lyn runs a brokerage and maintains a master file for all the office transactions. The file
must be maintained for how long? -Correct Answer ✔As long as Lyn's state requires
All files must be maintained on state law requirements.
Milo is interested in converting his rental properties into condominiums. He's completed
his feasibility study and determined that the conversion costs will pay for themselves at
sale time and the market will support the conversion. What else does Milo need to do
prior to conversion? -Correct Answer ✔Make certain the conversion will be allowed by
the local government
Ricky Nubbins is three months behind in his rent and has received several reminders
from the landlord that the rent is past due. As a result, the landlord has begun working
through proper channels to legally end Ricky's lease before the contract end date. The
landlord is terminating his lease through ______. -Correct Answer ✔Eviction
If you and a sibling both inherited your father's property when he died, what type of
deed would you need to get from your sibling in order to be the sole owner of the
property? -Correct Answer ✔Quitclaim deed
Texas SAE Real Estate Investment
,Texas SAE Real Estate Investment
What is the name of the tenant group that, along with the property manager, is
responsible for regional shopping center promotional activities? -Correct Answer
✔Merchants' association
Quentin is a victim of fair housing discrimination who is seeking redress in federal court.
What is the limit on the amount of punitive damages he may be awarded? -Correct
Answer ✔There is no limit
Which of the following is a passive type of real estate investment? -Correct Answer
✔limited partnership
Which statement best describes an amortized loan? -Correct Answer ✔Debt that is paid
off by making periodic payments consisting of interest and principal
With an amortized loan, the principal is paid down over the life of the loan according to
an amortization schedule, typically through equal payments.
Kristoff got a bit behind on his mortgage and missed several payments. He and his
lender devised a schedule that gives Kristoff an opportunity to make up those
delinquent payments. What is this an example of? -Correct Answer ✔Repayment plan
Kali's good at bargaining. She's willing to concede some things in order to entice a new
tenant into taking one of the rental spaces in the mall, but she always ensures that she's
looking out for the owner's interests by including a certain number of escalation clauses.
Which commercial property manager duty is Kali exceptionally good at? -Correct
Answer ✔Leasing the property
Who is the withholding agent under Foreign Investment in Real Property Tax Act? -
Correct Answer ✔Buyer
Property manager Elise sends a monthly report to her client Katherine, who owns an
apartment complex. What can Katherine expect to see on this report? -Correct Answer
✔Rental receipts, income, disbursements, and operating expenses
Who might be impacted by the expiration of abatements? -Correct Answer ✔New
buyers
Cooperative owners are actually called ______. -Correct Answer ✔Shareholders
Hester has been doing her research and attending city planning meetings in hopes of
finding a single-family home on the edge of a commercial district. What type of
investment opportunity is Hester looking for? -Correct Answer ✔A home targeted for
rezoning
Texas SAE Real Estate Investment
, Texas SAE Real Estate Investment
Which of the following investors is exempt from fair housing laws? -Correct Answer ✔An
investor who owns fewer than three single-family homes
An investor who owns three or fewer single-family homes, and who doesn't use real
estate licensees to assist in the sale of the investment properties is exempt from fair
housing laws.
If a minor enters into a contract with an adult, which of the following is true? -Correct
Answer ✔The minor may legally hold the adult to the contract, but the adult cannot
legally hold the minor to the contract.
Deidra wants to invest in a super-regional shopping center. What size trade area can
she plan to service? -Correct Answer ✔Five to 25 miles
Which of the following statements about an office condo owner's responsibilities is true?
-Correct Answer ✔The owner is responsible for paying the PITI.
An LOA of 10% means that assessments are _________. -Correct Answer ✔At 10% of
value
Leases may be terminated by expiration, eviction, or ______. -Correct Answer ✔Mutual
agreement
Leases may be terminated by expiration, eviction, or mutual agreement.
Liz is assisting a client who's looking for a commercial space to lease. Which of the
following duties will Liz be expected to perform on her client's behalf? -Correct Answer
✔Represent her client's interest in all negotiations and transactions regarding the lease
of the property.
Which of the following is an advantage of leasing for a single-lot investor? -Correct
Answer ✔Leasing gives the investor an income stream for the term of the lease.
(Leasing provides the investor with an income stream for the term of the lease. The
investor may also use a long-term lease as collateral to get financing for additional
investments.)
In commercial lease agreements, tenants pay the owner in exchange for ______. -
Correct Answer ✔The right to operate their business on the property
Which of the following organizations is temporary in nature? -Correct Answer ✔Joint
venture
Which of the following could indicate an underground storage tank is present? -Correct
Answer ✔Pipe or vent sticking out of the ground
Texas SAE Real Estate Investment
Texas SAE Real Estate Investment Exam
Study Guide Questions and Answers
2025
Which class of office building is aimed at tenants requiring functional space at below-
average rents for the area? -Correct Answer ✔Class C
Class C office buildings command below-average rates for the area. They're functional,
but not prestigious.
With a triple net lease, the tenant pays _______ separately from the base rent. -Correct
Answer ✔Taxes, insurance, and maintenance
When two very similar properties are for sale in the same neighborhood, which one will
sell first according to the principle of substitution? -Correct Answer ✔The lower priced
home
To protect themselves from liability, it's a good idea for property managers to ______. -
Correct Answer ✔Stay up to date on local landlord-tenant laws
According to the International Council for Shopping Centers, which commercial property
comprises only 1% of the retail industry? -Correct Answer ✔Factory outlet
Which payment plan consists of the borrower paying a constant amount made up of
principal and interest on a periodic basis (usually monthly)? -Correct Answer ✔Fully
amortized loan payment plan
Why are many middle-income cooperatives converted to condominiums? -Correct
Answer ✔To make resale easier
What type of lease is used most often with community shopping centers? -Correct
Answer ✔percentage
Property taxes generate approximately ______ of local government revenue. -Correct
Answer ✔one third (1/3)
Brittany has a small office in a professional building. She has a set monthly lease
payment that has been calculated to include maintenance of the common areas in the
building, such as the restroom and small kitchen, and all nets, utilities, and janitorial
charges for her space. The payment also includes taxes and insurance. The landlord
takes these payments and pays the individual expenses himself. What type of lease
does Brittany have? -Correct Answer ✔Gross lease
Texas SAE Real Estate Investment
,Texas SAE Real Estate Investment
Which of the following statements best describes the judicial foreclosure and sale
process? -Correct Answer ✔The lender must seek the court's permission to foreclose
on the property used as collateral for the loan.
What's compound interest? -Correct Answer ✔Interest that's reinvested into an account
that then earns interest
The owner's covenants and an insurance provision are included in which of the
following documents? -Correct Answer ✔Property management agreement
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? -
Correct Answer ✔Foreign Investment in Real Estate Property Tax Act (FIRPTA)
Jenner purchased his first home, to which he'll have access forever, as far as he knows.
Jenner owns ______. -Correct Answer ✔A freehold estate
What is the formal action to impose the property tax? -Correct Answer ✔levy
Which clause in a commercial lease determines how the tenant may use the space? -
Correct Answer ✔Use
The element of a deed that signifies the grantor's intention to transfer title to the grantee
is the ______. -Correct Answer ✔Act of conveyance
Lyn runs a brokerage and maintains a master file for all the office transactions. The file
must be maintained for how long? -Correct Answer ✔As long as Lyn's state requires
All files must be maintained on state law requirements.
Milo is interested in converting his rental properties into condominiums. He's completed
his feasibility study and determined that the conversion costs will pay for themselves at
sale time and the market will support the conversion. What else does Milo need to do
prior to conversion? -Correct Answer ✔Make certain the conversion will be allowed by
the local government
Ricky Nubbins is three months behind in his rent and has received several reminders
from the landlord that the rent is past due. As a result, the landlord has begun working
through proper channels to legally end Ricky's lease before the contract end date. The
landlord is terminating his lease through ______. -Correct Answer ✔Eviction
If you and a sibling both inherited your father's property when he died, what type of
deed would you need to get from your sibling in order to be the sole owner of the
property? -Correct Answer ✔Quitclaim deed
Texas SAE Real Estate Investment
,Texas SAE Real Estate Investment
What is the name of the tenant group that, along with the property manager, is
responsible for regional shopping center promotional activities? -Correct Answer
✔Merchants' association
Quentin is a victim of fair housing discrimination who is seeking redress in federal court.
What is the limit on the amount of punitive damages he may be awarded? -Correct
Answer ✔There is no limit
Which of the following is a passive type of real estate investment? -Correct Answer
✔limited partnership
Which statement best describes an amortized loan? -Correct Answer ✔Debt that is paid
off by making periodic payments consisting of interest and principal
With an amortized loan, the principal is paid down over the life of the loan according to
an amortization schedule, typically through equal payments.
Kristoff got a bit behind on his mortgage and missed several payments. He and his
lender devised a schedule that gives Kristoff an opportunity to make up those
delinquent payments. What is this an example of? -Correct Answer ✔Repayment plan
Kali's good at bargaining. She's willing to concede some things in order to entice a new
tenant into taking one of the rental spaces in the mall, but she always ensures that she's
looking out for the owner's interests by including a certain number of escalation clauses.
Which commercial property manager duty is Kali exceptionally good at? -Correct
Answer ✔Leasing the property
Who is the withholding agent under Foreign Investment in Real Property Tax Act? -
Correct Answer ✔Buyer
Property manager Elise sends a monthly report to her client Katherine, who owns an
apartment complex. What can Katherine expect to see on this report? -Correct Answer
✔Rental receipts, income, disbursements, and operating expenses
Who might be impacted by the expiration of abatements? -Correct Answer ✔New
buyers
Cooperative owners are actually called ______. -Correct Answer ✔Shareholders
Hester has been doing her research and attending city planning meetings in hopes of
finding a single-family home on the edge of a commercial district. What type of
investment opportunity is Hester looking for? -Correct Answer ✔A home targeted for
rezoning
Texas SAE Real Estate Investment
, Texas SAE Real Estate Investment
Which of the following investors is exempt from fair housing laws? -Correct Answer ✔An
investor who owns fewer than three single-family homes
An investor who owns three or fewer single-family homes, and who doesn't use real
estate licensees to assist in the sale of the investment properties is exempt from fair
housing laws.
If a minor enters into a contract with an adult, which of the following is true? -Correct
Answer ✔The minor may legally hold the adult to the contract, but the adult cannot
legally hold the minor to the contract.
Deidra wants to invest in a super-regional shopping center. What size trade area can
she plan to service? -Correct Answer ✔Five to 25 miles
Which of the following statements about an office condo owner's responsibilities is true?
-Correct Answer ✔The owner is responsible for paying the PITI.
An LOA of 10% means that assessments are _________. -Correct Answer ✔At 10% of
value
Leases may be terminated by expiration, eviction, or ______. -Correct Answer ✔Mutual
agreement
Leases may be terminated by expiration, eviction, or mutual agreement.
Liz is assisting a client who's looking for a commercial space to lease. Which of the
following duties will Liz be expected to perform on her client's behalf? -Correct Answer
✔Represent her client's interest in all negotiations and transactions regarding the lease
of the property.
Which of the following is an advantage of leasing for a single-lot investor? -Correct
Answer ✔Leasing gives the investor an income stream for the term of the lease.
(Leasing provides the investor with an income stream for the term of the lease. The
investor may also use a long-term lease as collateral to get financing for additional
investments.)
In commercial lease agreements, tenants pay the owner in exchange for ______. -
Correct Answer ✔The right to operate their business on the property
Which of the following organizations is temporary in nature? -Correct Answer ✔Joint
venture
Which of the following could indicate an underground storage tank is present? -Correct
Answer ✔Pipe or vent sticking out of the ground
Texas SAE Real Estate Investment
