TEXAS REAL ESTATE INVESTMENT EXAM 2023-
F F F F F
2024 ACTUAL EXAM 250 QUESTIONS AND CORRECT
F F F F F F
DETAILED ANSWERS (VERIFIED AND CORRECT ANS
F F F F F
WERS) |ALREADY GRADED A
F F F
WhichFofFtheFfollowingFRealFEstateFInvestmentFTrustsFfocusFonFlendingFmoneyFforFmortgagesFandFinvestin
gFinFmortgage-backedFsecurities?
EquityFREITFInve
stmentFREITFMo
rtgageFREIT
SecurityFREITF-FANSWER-EquityFREIT
(InFthisFtypeFofFpartnership,Fnon-generalFpartnersFareFlimitedFinFtheirFauthority.)
InFthisFtypeFofFpartnership,Fnon-
generalFpartnersFareFlimitedFinFtheirFauthority.FLiabilityFpartnership
LimitedFpartnership
LLCFpartnership
F
S-corporationFpartnershipF-FANSWER-LimitedFPartnership
(InFaFlimitedFpartnership,FlimitedFpartnersFhaveFlessFriskFandFlessFauthority.)
EzraFhasFfiledFaFfairFhousingFdiscriminationFcomplaintFagainstFanFinvestor.FHUDFisFinvestigating.FWithinFho
wFmanyFdaysFofFreceivingFtheFcomplaintFdoesFHUDFhaveFtoFrespond?
100
30
60
90F-FANSWER-100
(WithinF100FdaysFofFreceivingFtheFcompliant,FHUDFwillFinvestigateFandFdetermineFwhetherFreasonableFca
useFexistsFtoFbringFaFchargeFofFillegalFdiscriminationFagainstFtheFallegedFoffender,ForFitFwillFdismissFtheFcase
.)
,What'sFtheFnameFofFtheFtaxFprogramFthatFrequiresFaFwithholdingFofFaFportionFofFtheFgrossFpurchaseFpriceF
whenFforeignFownersFofFrealFestateFinFtheFU.S.FsellFthatFproperty?
ForeignFInvestmentFinFRealFEstateFPropertyFTaxFActF(FIRPTA)F
ForeignFInvestorFRealFEstateFInvestmentFTaxF(FIRE-
IT)FForeignFRealFEstateFTaxFWithholdingFActF(FRETWA)
TaxFWithholdingFforFForeignFHoldingFActF(TWFHA)F-FANSWER-
ForeignFInvestmentFinFRealFEstateFPropertyFTaxFActF(FIRPTA)
Who'sFtheFmortgagorFinFaFmortgage?FBor
rower
LenderF
Trustee
TrustorF-FANSWER-Borrower
(PlainFEnglishFforFtheFmortgagorFisF"borrower."FThisFisFbecauseFtheFborrowerFestablishesFtheFmortgageFasF
aFsecurityFinstrumentFforFtheFloan.)
WhenFaFborrowerFhasFpaidFoffFtheFloan,FhowFisFtheFreleaseFhandledFifFtheFsecurityFinstrumentFisFaFmortgag
e?
TheFlenderFexecutesFandFrecordsFaFdeedFofFreconveyanceFandFreturnsFtheFnoteFtoFtheFborrower.FTh
eFlenderFexecutesFandFrecordsFaFsatisfactionFofFmortgageFandFreturnsFtheFnoteFtoFtheFborrower.FTheF
lenderFfilesFforFaFreleaseFofFlienFandFreturnsFtheFnoteFtoFtheFborrower.
TheFlenderFreturnsFtheFnoteFandFmortgageFtoFtheFborrower.F-FANSWER-
TheFlenderFexecutesFandFrecordsFaFsatisfactionFofFmortgageFandFreturnsFtheFnoteFtoFtheFborrower.
(WhenFaFborrowerFhasFpaidFtheFloanFinFfull,Fit'sFtheFlender'sFresponsibilityFtoFexecuteFandFrecordFaFsatisfac
tionFofFmortgage.)
DuringFtheFoptionFperiodFtoFrenewFaFlease,FwhoFdeterminesFwhetherFtheFoptionFwillFbeFexercised?FEi
therFtheFlandlordForFtheFtenantFcanFmakeFtheFdecision.
ItFmustFbeFmutuallyFagreedFtoFbyFbothFtheFlandlordFandFtheFtenant.FTh
eFlandlordFmakesFtheFdecision.
TheFtenantFmakesFtheFdecision.F-FANSWER-TheFtenantFmakesFtheFdecision.
,(WhenFthere'sFanFoptionFperiodFinFplay,FtheFleaseFcanFbeFrenewedFatFtheFsoleFdiscretionFofFtheFtenant.FTh
eFlandlordFhasFnoFsayFinFwhetherFtheFoptionFwillFbeFexercisedF(orFnot).)
WhichFpaymentFplanFconsistsFofFtheFborrowerFpayingFaFconstantFamountFmadeFupFofFprincipalFandFinteres
tFonFaFperiodicFbasisF(usuallyFmonthly)?
TheFlenderFreturnsFtheFnoteFandFmortgageFtoFtheFborrower.F
FlexibleFpaymentFplan
FullyFamortizedFloanFpaymentFplanF
Interest-onlyFpaymentFplan
PartiallyFamortizedFpaymentFplanF-FANSWER-FullyFamortizedFloanFpaymentFplan
(OverFtime,FmoreFofFtheFpaymentFgoesFtowardFtheFprincipal,FandFlessFtowardFtheFinterest.FByFtheFendFofFt
heFloan,FtheFpaymentFgoesFalmostFentirelyFtowardFtheFloan'sFprincipal.)
Charlie,FwhoFownsFandFleasesFoutFaFcommercialFbuilding,FpaysFtaxes,Fmaintenance,FandFinsuranceFonFtheF
building.FWhatFtypeFofFleaseFagreementFdoesFCharlieFhaveFwithFhisFtenants?
GrossFN
et
Percentage
TripleFnetF-FANSWER-Gross
(WithFgrossFleases,FtheFlandlordFtypicallyFpaysFallFexpenses,FsuchFasFtaxes,Fmaintenance,FandFinsurance.)
ThisFisFtheFpartFofFEileen'sFjobFthatFsheFenjoysFtheFleast:FTellingFtenantsFtheyFhaveFtoFleaveFbecauseFt
hey'veFfailedFtoFcomplyFwithFtheFtermsFofFtheirFlease.FWhichFcommercialFpropertyFmanagerFdutyFisFE
ileenFhavingFtoFperform?
CollectingFrentFEvicti
ngFtenantsFLeasingFth
eFproperty
OverseeingFmaintenanceF-FANSWER-EvictingFTenants
(AFcommercialFpropertyFmanagerFisFresponsibleFforFevictingFtenantsFwhoFfailFtoFcomplyFwithFtheFtermsFan
dFconditionsFofFtheFleaseFagreement.)
, WhichFdocumentFincludesFtheFsizeFofFunits,Fconstruction,FfloorFplans,Famenities,FrecreationFfacilities,Fma
keFandFmodelFofFappliances,Fwindows,FhowFtheFlandscapingFofFtheFpropertyFwillFbeFmaintained,FandFtheFa
ctualFlandFonFwhichFaFcondominiumFbuildingFisFsituated?
BylawsFDeclarati
on
MarketingFbrochure
OfferingFplanF-FANSWER-OfferingFplan
(TheseFareFtheFrequiredFelementsFofFtheFofferingFplan.)
TheFriskFthatFisFdirectlyFrelatedFtoFleverageFisFcalledF
risk.
Business
F
CapitalFFinan
cial
LeverageF-FANSWER-Financial
(TheFmoreFmoneyFanFinvestorFleveragesF(orFborrows),FtheFgreaterFtheFfinancialFrisk.)
WhichFofFtheFfollowingFtermsFrefersFtoFtheFprocessFofFcombiningFseparateFadjacentFparcelsFintoFoneF
pieceFofFland?
Assemblage
ExcessFland
F
Plottage
F
SurplusFlandF-FANSWER-Assemblage
(ThisFisFtheFdefinitionFofFassemblage.FPlottageFisFtheFincreaseForFdecreaseFinFlandFvalueFthatFoccursFwhenF
severalFparcelsFareFcombinedFintoFoneFlargeFplot.)
AFpropertyFvaluedFatF$500,000FisFreturningFaFnetFannualFincomeFofF$45,000.FWhatFisFtheFcapFrateFforFthisFi
nvestment?
12.5%
7.5%
8%
F F F F F
2024 ACTUAL EXAM 250 QUESTIONS AND CORRECT
F F F F F F
DETAILED ANSWERS (VERIFIED AND CORRECT ANS
F F F F F
WERS) |ALREADY GRADED A
F F F
WhichFofFtheFfollowingFRealFEstateFInvestmentFTrustsFfocusFonFlendingFmoneyFforFmortgagesFandFinvestin
gFinFmortgage-backedFsecurities?
EquityFREITFInve
stmentFREITFMo
rtgageFREIT
SecurityFREITF-FANSWER-EquityFREIT
(InFthisFtypeFofFpartnership,Fnon-generalFpartnersFareFlimitedFinFtheirFauthority.)
InFthisFtypeFofFpartnership,Fnon-
generalFpartnersFareFlimitedFinFtheirFauthority.FLiabilityFpartnership
LimitedFpartnership
LLCFpartnership
F
S-corporationFpartnershipF-FANSWER-LimitedFPartnership
(InFaFlimitedFpartnership,FlimitedFpartnersFhaveFlessFriskFandFlessFauthority.)
EzraFhasFfiledFaFfairFhousingFdiscriminationFcomplaintFagainstFanFinvestor.FHUDFisFinvestigating.FWithinFho
wFmanyFdaysFofFreceivingFtheFcomplaintFdoesFHUDFhaveFtoFrespond?
100
30
60
90F-FANSWER-100
(WithinF100FdaysFofFreceivingFtheFcompliant,FHUDFwillFinvestigateFandFdetermineFwhetherFreasonableFca
useFexistsFtoFbringFaFchargeFofFillegalFdiscriminationFagainstFtheFallegedFoffender,ForFitFwillFdismissFtheFcase
.)
,What'sFtheFnameFofFtheFtaxFprogramFthatFrequiresFaFwithholdingFofFaFportionFofFtheFgrossFpurchaseFpriceF
whenFforeignFownersFofFrealFestateFinFtheFU.S.FsellFthatFproperty?
ForeignFInvestmentFinFRealFEstateFPropertyFTaxFActF(FIRPTA)F
ForeignFInvestorFRealFEstateFInvestmentFTaxF(FIRE-
IT)FForeignFRealFEstateFTaxFWithholdingFActF(FRETWA)
TaxFWithholdingFforFForeignFHoldingFActF(TWFHA)F-FANSWER-
ForeignFInvestmentFinFRealFEstateFPropertyFTaxFActF(FIRPTA)
Who'sFtheFmortgagorFinFaFmortgage?FBor
rower
LenderF
Trustee
TrustorF-FANSWER-Borrower
(PlainFEnglishFforFtheFmortgagorFisF"borrower."FThisFisFbecauseFtheFborrowerFestablishesFtheFmortgageFasF
aFsecurityFinstrumentFforFtheFloan.)
WhenFaFborrowerFhasFpaidFoffFtheFloan,FhowFisFtheFreleaseFhandledFifFtheFsecurityFinstrumentFisFaFmortgag
e?
TheFlenderFexecutesFandFrecordsFaFdeedFofFreconveyanceFandFreturnsFtheFnoteFtoFtheFborrower.FTh
eFlenderFexecutesFandFrecordsFaFsatisfactionFofFmortgageFandFreturnsFtheFnoteFtoFtheFborrower.FTheF
lenderFfilesFforFaFreleaseFofFlienFandFreturnsFtheFnoteFtoFtheFborrower.
TheFlenderFreturnsFtheFnoteFandFmortgageFtoFtheFborrower.F-FANSWER-
TheFlenderFexecutesFandFrecordsFaFsatisfactionFofFmortgageFandFreturnsFtheFnoteFtoFtheFborrower.
(WhenFaFborrowerFhasFpaidFtheFloanFinFfull,Fit'sFtheFlender'sFresponsibilityFtoFexecuteFandFrecordFaFsatisfac
tionFofFmortgage.)
DuringFtheFoptionFperiodFtoFrenewFaFlease,FwhoFdeterminesFwhetherFtheFoptionFwillFbeFexercised?FEi
therFtheFlandlordForFtheFtenantFcanFmakeFtheFdecision.
ItFmustFbeFmutuallyFagreedFtoFbyFbothFtheFlandlordFandFtheFtenant.FTh
eFlandlordFmakesFtheFdecision.
TheFtenantFmakesFtheFdecision.F-FANSWER-TheFtenantFmakesFtheFdecision.
,(WhenFthere'sFanFoptionFperiodFinFplay,FtheFleaseFcanFbeFrenewedFatFtheFsoleFdiscretionFofFtheFtenant.FTh
eFlandlordFhasFnoFsayFinFwhetherFtheFoptionFwillFbeFexercisedF(orFnot).)
WhichFpaymentFplanFconsistsFofFtheFborrowerFpayingFaFconstantFamountFmadeFupFofFprincipalFandFinteres
tFonFaFperiodicFbasisF(usuallyFmonthly)?
TheFlenderFreturnsFtheFnoteFandFmortgageFtoFtheFborrower.F
FlexibleFpaymentFplan
FullyFamortizedFloanFpaymentFplanF
Interest-onlyFpaymentFplan
PartiallyFamortizedFpaymentFplanF-FANSWER-FullyFamortizedFloanFpaymentFplan
(OverFtime,FmoreFofFtheFpaymentFgoesFtowardFtheFprincipal,FandFlessFtowardFtheFinterest.FByFtheFendFofFt
heFloan,FtheFpaymentFgoesFalmostFentirelyFtowardFtheFloan'sFprincipal.)
Charlie,FwhoFownsFandFleasesFoutFaFcommercialFbuilding,FpaysFtaxes,Fmaintenance,FandFinsuranceFonFtheF
building.FWhatFtypeFofFleaseFagreementFdoesFCharlieFhaveFwithFhisFtenants?
GrossFN
et
Percentage
TripleFnetF-FANSWER-Gross
(WithFgrossFleases,FtheFlandlordFtypicallyFpaysFallFexpenses,FsuchFasFtaxes,Fmaintenance,FandFinsurance.)
ThisFisFtheFpartFofFEileen'sFjobFthatFsheFenjoysFtheFleast:FTellingFtenantsFtheyFhaveFtoFleaveFbecauseFt
hey'veFfailedFtoFcomplyFwithFtheFtermsFofFtheirFlease.FWhichFcommercialFpropertyFmanagerFdutyFisFE
ileenFhavingFtoFperform?
CollectingFrentFEvicti
ngFtenantsFLeasingFth
eFproperty
OverseeingFmaintenanceF-FANSWER-EvictingFTenants
(AFcommercialFpropertyFmanagerFisFresponsibleFforFevictingFtenantsFwhoFfailFtoFcomplyFwithFtheFtermsFan
dFconditionsFofFtheFleaseFagreement.)
, WhichFdocumentFincludesFtheFsizeFofFunits,Fconstruction,FfloorFplans,Famenities,FrecreationFfacilities,Fma
keFandFmodelFofFappliances,Fwindows,FhowFtheFlandscapingFofFtheFpropertyFwillFbeFmaintained,FandFtheFa
ctualFlandFonFwhichFaFcondominiumFbuildingFisFsituated?
BylawsFDeclarati
on
MarketingFbrochure
OfferingFplanF-FANSWER-OfferingFplan
(TheseFareFtheFrequiredFelementsFofFtheFofferingFplan.)
TheFriskFthatFisFdirectlyFrelatedFtoFleverageFisFcalledF
risk.
Business
F
CapitalFFinan
cial
LeverageF-FANSWER-Financial
(TheFmoreFmoneyFanFinvestorFleveragesF(orFborrows),FtheFgreaterFtheFfinancialFrisk.)
WhichFofFtheFfollowingFtermsFrefersFtoFtheFprocessFofFcombiningFseparateFadjacentFparcelsFintoFoneF
pieceFofFland?
Assemblage
ExcessFland
F
Plottage
F
SurplusFlandF-FANSWER-Assemblage
(ThisFisFtheFdefinitionFofFassemblage.FPlottageFisFtheFincreaseForFdecreaseFinFlandFvalueFthatFoccursFwhenF
severalFparcelsFareFcombinedFintoFoneFlargeFplot.)
AFpropertyFvaluedFatF$500,000FisFreturningFaFnetFannualFincomeFofF$45,000.FWhatFisFtheFcapFrateFforFthisFi
nvestment?
12.5%
7.5%
8%
