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Final CE Shop Study Guide exams questions and answers. Final CE Shop Study Guide exams questions and answers. Final CE Shop Study Guide exams questions and answers. Final CE Shop Study Guide exams questions and answers.

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  • August 24, 2024
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  • 2024/2025
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Final CE Shop Study Guide exams
questions and answers




Cash-on ;Cash ;return ;- ;correct ;Answers ;✔✔ ;-1: ;A ;comparison ;of ;before-
tax ;cash ;flow ;to ;cash ;invested

2: ;A ;rate ;of ;return ;that ;calculates ;the ;cash ;income ;earned ;on ;the ;total ;cash ;invested

Building ;specifications ;- ;correct ;Answers ;✔✔ ;-
1: ;Unlike ;most ;construction ;documents, ;this ;one ;is ;in ;writing. ;Often ;called ;"Written ;narratives" ;beca
use ;specifications ;describe ;the ;features, ;materials ;and ;products ;to ;be ;used ;in ;construction.

Commercial ;and ;investment ;properties: ;Characteristics ;of ;investments ;- ;correct ;Answers ;✔✔ ;-1-52

Mortgage ;REITs ;- ;correct ;Answers ;✔✔ ;-
1: ;Don't ;buy ;properties, ;but ;instead ;invest ;in ;real ;estate ;debt.



2: ;Some ;of ;them ;made ;loans ;in ;the ;past, ;but ;now ;most ;buy ;commercial ;and ;residential ;mortgage-
backed ;securities.



3: ;Many ;focus ;on ;buying ;mortgage ;securities ;guaranteed ;by ;Freddie ;Mac ;and ;Fannie ;Mae.



4: ;---- ;make ;money ;by ;incurring ;short-term ;debt ;to ;acquire ;longer-term ;mortgage ;securities, ;earning
;the ;spread ;between ;the ;two ;rates.

,5: ;During ;periods ;when ;the ;Federal ;Reserve ;keeps ;short-term ;interest ;rates ;low ;
(to ;stimulate ;the ;economy), ;---- ;are ;popular ;investments ;because ;they ;reduce ;the ;--- ;borrowing ;cost
s.

Equity ;REITs ;- ;correct ;Answers ;✔✔ ;-1: ;Purchase ;properties ;



2: ;--- ;make ;money ;primarily ;from ;their ;properties' ;rents ;and ;tend ;to ;specialize ;in ;owning ;certain ;bu
ilding ;types ;(such ;as ;apartments, ;regional ;malls, ;self-storage, ;office ;buildings ;or ;hotels



3: ;----- ;are ;registered ;with ;the ;SEC ;regardless ;of ;whether ;they ;are ;public ;
(and ;therefore ;listed ;on ;major ;stock ;exchanges) ;or ;private.



4: ;most ;likely ;to ;be ;part ;of ;an ;equity ;REIT's ;investment? ;Retail ;shopping ;centers

Covenant ;against ;encumbrances ;- ;correct ;Answers ;✔✔ ;-
1: ;This ;is ;when ;the ;grantor ;assures ;to ;the ;grantee ;that ;outside ;of ;public ;records ;and ;whats ;in ;the ;
deed, ;there ;are ;no ;encumbrances ;against ;the ;title.

Quitclaim ;Deed ;- ;correct ;Answers ;✔✔ ;-1: ;A ;deed ;that ;transfers ;property ;quickly ;



2: ;This ;gives ;the ;property ;to ;the ;new ;owner ;without ;making ;any ;promises ;about ;the ;title.

Referee's ;Deed ;- ;correct ;Answers ;✔✔ ;-
1: ;A ;deed ;that ;does ;not ;offer ;any ;warranties ;or ;agreements ;but ;does ;imply ;ownership. ;



2: ;often ;used ;in ;bankruptcy ;proceedings ;and ;foreclosures

Devisor ;- ;correct ;Answers ;✔✔ ;-1: ;The ;person ;who ;writes ;the ;will ;is ;called ;this. ;



2: ;The ;person ;receiving ;the ;will ;is ;the ;devisee.

Federal ;fair ;housing ;act ;1968 ;- ;correct ;Answers ;✔✔ ;-
1: ;Color, ;religion, ;national ;origin ;were ;added ;as ;a ;protected ;class. ;

,2: ;Prohibits ;discrimination ;based ;on ;race, ;religion, ;color, ;and ;national ;origin ;in ;the ;sale ;or ;rental ;of ;
residential ;real ;estate



Ex. ;The ;Federal ;Fair ;Housing ;Act ;of ;1968 ;also ;created ;the ;Office ;of ;Fair ;Housing ;and ;Equal ;Opportu
nity.



3: ;created ;the ;Office ;of ;Fair ;Housing ;Equal ;Opportunity ;(OFHEO)

Fair ;Housing ;amendment ;Act ;- ;correct ;Answers ;✔✔ ;-
1: ;I988. ;Disability ;and ;familial ;status ;was ;added ;as ;a ;protect ;class.

Shared ;Equity ;Mortgage ;- ;correct ;Answers ;✔✔ ;-1: ;This ;is ;used ;most ;often ;in ;commercial ;lending.



2: ;The ;borrower ;agrees ;to ;the ;lender's ;participation ;in ;the ;net ;income ;from ;the ;commercial ;propert
y ;or ;enterprise ;in ;order ;to ;obtain ;the ;loan.

1031 ;Tax ;Deferred ;exchange ;
(Named ;after ;section ;1031 ;of ;internal ;revenue ;code) ;- ;correct ;Answers ;✔✔ ;-
1: ;Allows ;investors ;to ;sell ;a ;property ;and ;reinvest ;the ;proceeds ;into ;a ;new ;property ;
(as ;part ;of ;a ;qualifying ;like-kind ;exchange) ;while ;postponing ;the ;payment ;of ;capital ;gain ;taxes.



2: ;The ;investment ;must ;be ;held ;for ;business ;/ ;investment ;purposes. ;



3: ;Proceeds ;from ;the ;sale ;must ;be ;passed ;through ;the ;hands ;of ;a ;qualified ;intermediary. ;



4: ;The ;replacement ;property ;must ;involve ;and ;equal ;or ;greater ;level ;of ;debt ;than ;the ;property ;sold
.;



5: ;Foreign ;investors ;may ;participate. ;



6: ;Property ;identification ;within ;45 ;days. ;Closing ;within ;180 ;days.

, Six ;relevant ;IRS ;Rules ;- ;correct ;Answers ;✔✔ ;-Rule ;1: ;Properties ;are ;of ;like-
kind ;if ;they're ;of ;the ;same ;nature ;or ;character, ;even ;if ;they ;differ ;in ;grade ;or ;quality. ;Example ;- ;an
;apartment ;building ;would ;generally ;be ;like-kind ;to ;another ;apartment ;building.




Rule ;2: ;The ;basis ;of ;the ;original ;property ;carries ;over ;to ;the ;new ;property. ;It ;doesn't ;change. ;So ;if ;
your ;investor ;has ;a ;property ;worth ;$500,000 ;with ;a ;basis ;of ;
$100,000, ;and ;then ;exchanges ;it ;for ;a ;property ;also ;worth ;
$500,000, ;the ;basis ;in ;the ;new ;property ;is ;$100,000 ;plus ;any ;new ;debt ;taken ;on ;and ;any ;cash ;paid
;out.




Rule ;3: ;The ;new ;property ;has ;to ;come ;with ;the ;same ;or ;greater ;debt ;load ;for ;the ;investor. ;If ;it ;do
esn't, ;the ;investor ;is ;liable ;for ;paying ;the ;gain ;on ;the ;difference.



Rule ;4: ;The ;investor ;has ;to ;use ;a ;qualified ;intermediary ;
(QI) ;to ;conduct ;the ;exchange. ;This ;means ;that ;your ;clients ;can't ;do ;the ;exchange ;for ;themselves. ;T
he ;intermediary ;must ;be ;a ;person ;who ;has ;NOT ;worked ;with ;the ;investor ;within ;the ;last ;two ;years
.



Rule ;5: ;The ;investor ;has ;45 ;days ;from ;the ;day ;of ;closing ;on ;one ;property ;to ;identify ;and ;commit ;in
;writing ;to ;the ;next ;property. ;The ;investor ;has ;180 ;days ;from ;the ;date ;the ;original ;property ;closes ;t
o ;close ;on ;the ;new ;investment ;property.



Rule ;6: ;The ;1031 ;must ;be ;disclosed ;to ;the ;buyer. ;At ;the ;time ;of ;the ;sale ;and ;at ;the ;time ;of ;the ;pu
rchase, ;you ;have ;to ;tell ;the ;parties ;to ;the ;transactions ;that ;you're ;doing ;a ;like-kind ;exchange—
and ;get ;the ;disclosure ;in ;writing.

Similarities ;of ;real ;estate ;and ;business ;brokerages ;- ;correct ;Answers ;✔✔ ;-
1: ;They ;both ;require ;a ;real ;estate ;license.



2: ;They ;both ;involve ;the ;sale ;of ;real ;property ;or ;the ;assignment ;of ;a ;long-term ;lease.

Real ;Estate ;Business ;- ;correct ;Answers ;✔✔ ;-
1: ;It ;deals ;solely ;in ;real ;property: ;buying, ;selling, ;and ;leasing.

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