TEXAS SAE REAL ESTATE INVESTMENT 2 LATEST VERSIONS (VERSIONS A & B) ACTUAL EXAM 300 REAL EXAM
QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS)|ALREADY GRADED A+
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
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
,TEXAS SAE REAL ESTATE INVESTMENT 2 LATEST VERSIONS (VERSIONS A & B) ACTUAL EXAM 300 REAL EXAM
QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS)|ALREADY GRADED A+
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
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
,TEXAS SAE REAL ESTATE INVESTMENT 2 LATEST VERSIONS (VERSIONS A & B) ACTUAL EXAM 300 REAL EXAM
QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS)|ALREADY GRADED A+
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
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.
, TEXAS SAE REAL ESTATE INVESTMENT 2 LATEST VERSIONS (VERSIONS A & B) ACTUAL EXAM 300 REAL EXAM
QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS)|ALREADY GRADED A+
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
Which special lease clause stipulates that the tenant is responsible for paying any increase in
taxes over the base year's taxes, in addition to the base rent? - correct answer Tax
What is maximum equity? - correct answer The maximum amount the borrower is willing/able
to invest
(Maximum equity is the amount the borrower is willing/able to invest. This is determined by
dividing the cash flow by the desired rate of return.)
If David, a landowner, isn't ready to sell his land, ______ can provide himwith an income
stream. - correct answer Leasing to a long-term tenant
QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS)|ALREADY GRADED A+
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
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
,TEXAS SAE REAL ESTATE INVESTMENT 2 LATEST VERSIONS (VERSIONS A & B) ACTUAL EXAM 300 REAL EXAM
QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS)|ALREADY GRADED A+
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
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
,TEXAS SAE REAL ESTATE INVESTMENT 2 LATEST VERSIONS (VERSIONS A & B) ACTUAL EXAM 300 REAL EXAM
QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS)|ALREADY GRADED A+
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
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.
, TEXAS SAE REAL ESTATE INVESTMENT 2 LATEST VERSIONS (VERSIONS A & B) ACTUAL EXAM 300 REAL EXAM
QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS)|ALREADY GRADED A+
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
Which special lease clause stipulates that the tenant is responsible for paying any increase in
taxes over the base year's taxes, in addition to the base rent? - correct answer Tax
What is maximum equity? - correct answer The maximum amount the borrower is willing/able
to invest
(Maximum equity is the amount the borrower is willing/able to invest. This is determined by
dividing the cash flow by the desired rate of return.)
If David, a landowner, isn't ready to sell his land, ______ can provide himwith an income
stream. - correct answer Leasing to a long-term tenant
