TEXAS REAL ESTATE INVESTMENT EXAM 2025-2026
ACTUAL EXAM 250 QUESTIONS AND CORRECT
DETAILED ANSWERS |ALREADY GRADED A
Overview:
This exam preparation tool reflects the latest Texas real estate laws, investment principles,
and market practices. With detailed rationales, it reinforces essential concepts, from property
valuation to financing, taxation, ethics, and investment strategies tailored to Texas regulations.
Key Features:
250 real exam-style questions with verified correct answers.
In-depth explanations to strengthen learning and decision-making.
Fully aligned with Texas real estate investment exam requirements.
Verified A-grade quality for accuracy and completeness.
Covers property management, financing, investment analysis, contracts, and taxation.
Purpose:
Provide candidates with a realistic preparation resource for the Texas Real Estate
Investment Exam.
Enhance understanding of complex real estate investment principles.
Improve exam readiness and professional confidence.
Recommended For:
Aspiring real estate investors preparing for the Texas Real Estate Investment Exam.
Licensed real estate professionals seeking advanced certification or knowledge
reinforcement.
Educators, trainers, and exam prep providers needing reliable review materials.
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 - ANSWER-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 - ANSWER-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
30
60
90 - ANSWER-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) - ANSWER-Foreign Investment in Real Estate Property
Tax Act (FIRPTA)
Who's the mortgagor in a mortgage?
Borrower
Lender
Trustee
Trustor - ANSWER-Borrower
,(Plain English for the mortgagor is "borrower." This is because the borrower establishes the mortgage as
a security instrument for the loan.)
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. - ANSWER-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. - ANSWER-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)?
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 - ANSWER-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 - ANSWER-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
Leasing the property
Overseeing maintenance - ANSWER-Evicting Tenants
(A commercial property manager is responsible for evicting tenants who fail to comply with the terms and
conditions of the lease agreement.)
Which document includes the size of units, construction, floor plans, amenities, recreation facilities,
make and model of appliances, windows, how the landscaping of the property will be maintained, and
the actual land on which a condominium building is situated?
Bylaws
Declaration
Marketing brochure
Offering plan - ANSWER-Offering plan
(These are the required elements of the offering plan.)
The risk that is directly related to leverage is called ______ risk.
Business
Capital
Financial
Leverage - ANSWER-Financial
ACTUAL EXAM 250 QUESTIONS AND CORRECT
DETAILED ANSWERS |ALREADY GRADED A
Overview:
This exam preparation tool reflects the latest Texas real estate laws, investment principles,
and market practices. With detailed rationales, it reinforces essential concepts, from property
valuation to financing, taxation, ethics, and investment strategies tailored to Texas regulations.
Key Features:
250 real exam-style questions with verified correct answers.
In-depth explanations to strengthen learning and decision-making.
Fully aligned with Texas real estate investment exam requirements.
Verified A-grade quality for accuracy and completeness.
Covers property management, financing, investment analysis, contracts, and taxation.
Purpose:
Provide candidates with a realistic preparation resource for the Texas Real Estate
Investment Exam.
Enhance understanding of complex real estate investment principles.
Improve exam readiness and professional confidence.
Recommended For:
Aspiring real estate investors preparing for the Texas Real Estate Investment Exam.
Licensed real estate professionals seeking advanced certification or knowledge
reinforcement.
Educators, trainers, and exam prep providers needing reliable review materials.
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 - ANSWER-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 - ANSWER-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
30
60
90 - ANSWER-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) - ANSWER-Foreign Investment in Real Estate Property
Tax Act (FIRPTA)
Who's the mortgagor in a mortgage?
Borrower
Lender
Trustee
Trustor - ANSWER-Borrower
,(Plain English for the mortgagor is "borrower." This is because the borrower establishes the mortgage as
a security instrument for the loan.)
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. - ANSWER-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. - ANSWER-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)?
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 - ANSWER-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 - ANSWER-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
Leasing the property
Overseeing maintenance - ANSWER-Evicting Tenants
(A commercial property manager is responsible for evicting tenants who fail to comply with the terms and
conditions of the lease agreement.)
Which document includes the size of units, construction, floor plans, amenities, recreation facilities,
make and model of appliances, windows, how the landscaping of the property will be maintained, and
the actual land on which a condominium building is situated?
Bylaws
Declaration
Marketing brochure
Offering plan - ANSWER-Offering plan
(These are the required elements of the offering plan.)
The risk that is directly related to leverage is called ______ risk.
Business
Capital
Financial
Leverage - ANSWER-Financial
