ACEABLE AGENT PRINCIPLES OF REAL
ESTATE II 2026 CERTIFICATION PRACTICE
TEST AND STEP BY STEP SOLUTIONS
HANDBOOK
◉ RESERVE AUCTION
Answer: When a seller reserves the right to accept or reject the
highest bid within a predetermined time. *Provides GREATEST
degree of price control to seller.
◉ DEBT SERVICE
Answer: Money dedicated to making payments on the principal and
interest of a loan. Not considered an operational expense. *deducted
from NOI to arrive at PRE-TAX cash flow.
◉ OPERATING STATEMENT
Answer: Used to determine the cash flow potential of a property by
providing a clear picture of rental income stream (cash flow) and the
various expenditures (cash outflow) concluding with a bottom line,
after tax.
◉ GROSS RENT MULTIPLIER (GRM)
,Answer: Ratio of price of investment property to its annual rental
income before considering expenses like taxes and insurance.
◉ SYNDICATE
Answer: Limited Partnership - a group of individuals or
organizations combined to promote some common interest?
◉ MINIMUM BID AUCTION
Answer: What is a "No-reserve" auction. An auction which a
minimum acceptable sales price (reserve) is set.
◉ GROSS DOMESTIC PRODUCT (GDP)
Answer: Total value of goods produced/ services provided by a
country in a year.
◉ SALE AND LEASEBACK LOAN
Answer: What type of loan?
-finance commercial property
-allows business that has $ invested in a plant to use as working
capital
-buyer/investor becomes the lessor, owner becomes the lessee
◉ FEASIBLE STUDY
, Answer: A detailed analysis of the viability of an idea.
◉ SECTION 1031 EXCHANGE
Answer: Allows investors to sell a property and defer payment of
capital gain taxes on those sales.
◉ NET TAXABLE INCOME
Answer: 1. Subtract land value from property purchase price to get
total depreciable amount.
2. Divide this total depreciable amount by 27.5 to get yearly
allowable depreciation.
3. Subtract this yearly allowable depreciation amount from net
income to get ________________?
◉ ITEMS TO WRITE OFF WHEN FILING TAXES
Answer: What are these examples of?
-interest on loans for home improvements & business credit cards
-business mortgage interest
-repair costs to rental property
-local distance travel for business
-insurance premiums
-legal and professional fees paid to accountants and attorneys
-property depreciation
ESTATE II 2026 CERTIFICATION PRACTICE
TEST AND STEP BY STEP SOLUTIONS
HANDBOOK
◉ RESERVE AUCTION
Answer: When a seller reserves the right to accept or reject the
highest bid within a predetermined time. *Provides GREATEST
degree of price control to seller.
◉ DEBT SERVICE
Answer: Money dedicated to making payments on the principal and
interest of a loan. Not considered an operational expense. *deducted
from NOI to arrive at PRE-TAX cash flow.
◉ OPERATING STATEMENT
Answer: Used to determine the cash flow potential of a property by
providing a clear picture of rental income stream (cash flow) and the
various expenditures (cash outflow) concluding with a bottom line,
after tax.
◉ GROSS RENT MULTIPLIER (GRM)
,Answer: Ratio of price of investment property to its annual rental
income before considering expenses like taxes and insurance.
◉ SYNDICATE
Answer: Limited Partnership - a group of individuals or
organizations combined to promote some common interest?
◉ MINIMUM BID AUCTION
Answer: What is a "No-reserve" auction. An auction which a
minimum acceptable sales price (reserve) is set.
◉ GROSS DOMESTIC PRODUCT (GDP)
Answer: Total value of goods produced/ services provided by a
country in a year.
◉ SALE AND LEASEBACK LOAN
Answer: What type of loan?
-finance commercial property
-allows business that has $ invested in a plant to use as working
capital
-buyer/investor becomes the lessor, owner becomes the lessee
◉ FEASIBLE STUDY
, Answer: A detailed analysis of the viability of an idea.
◉ SECTION 1031 EXCHANGE
Answer: Allows investors to sell a property and defer payment of
capital gain taxes on those sales.
◉ NET TAXABLE INCOME
Answer: 1. Subtract land value from property purchase price to get
total depreciable amount.
2. Divide this total depreciable amount by 27.5 to get yearly
allowable depreciation.
3. Subtract this yearly allowable depreciation amount from net
income to get ________________?
◉ ITEMS TO WRITE OFF WHEN FILING TAXES
Answer: What are these examples of?
-interest on loans for home improvements & business credit cards
-business mortgage interest
-repair costs to rental property
-local distance travel for business
-insurance premiums
-legal and professional fees paid to accountants and attorneys
-property depreciation
