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REE3043 PRACTICE TEST QUESTIONS WITH REVISED ANSWERS – UPDATED!! $12.99
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REE3043 PRACTICE TEST QUESTIONS WITH REVISED ANSWERS – UPDATED!!
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REE3043 PRACTICE TEST QUESTIONS WITH REVISED ANSWERS – UPDATED!! There will be a fixed payment ( can be a year or monthly ). Then the rate is adjusted - Margin never changes - Index changes as per the terms of the loan - Answer-ARM - adjustable rate mortgage Example : - principle : $400 ...

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  • September 6, 2024
  • 7
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • ree3043
  • ree3043 practice test questions

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REE3043 PRACTICE TEST QUESTIONS
WITH REVISED ANSWERS – UPDATED!!
There will be a fixed payment ( can be a year or monthly ).
Then the rate is adjusted
- Margin never changes
- Index changes as per the terms of the loan - Answer-ARM - adjustable rate mortgage

Example :
- principle : $400
- interest : $600
- total payment : $1,000
- optional arm allows you to decide how much of your payment you want to send in
- whatever you send it goes to pay down the interest first. Anything left over goes
towards the principle - Answer-Option ARM

When the amount of your payment doesn't even cover the interest portion. So nothing
goes towards principle reduction
- any interest you don't pay gets added onto the principle so the loan balance goes up
every month
- never go into a negative amortization
- a lender would only allow a mortgage to increase by 10% before a pay,net would be
required to reduce the loan balance. - Answer-Negative amortization

Your mortgage payment would be :
- principle P
- interest I
- taxes T
- insurance I
- your taxes and insurance payments would go into an escrow fund so when the bill
comes into the bank for payment, the funds are in the account. - Answer-Property taxes
/ insurance

The timing of when you plan to exit out of the investment - Answer-Exit strategy

Opposite of a payback period
- cash in/ cash out - Answer-Cash on cash return

If NPV is 0, that is also equal to the IRR. Defined as that discount rate that brings the
present value of the cash outflows to $0.00 - Answer-Internal rate of return

Advantages to investing in real estate
- leverage ( the use of other people's money )
- 1031 exchange : the section of the IRS code. whatever you sell the 1st property for
must be spent. ( ex. $1,000,000 on the first property that must be spent when you do
the 1031 exchange.)
Disadvantages -
- leverage

, - isn't liquid if you want to sell the property quickly ( except share in a REIT )
- if the property is income producing, you have to pay someone to manage it or it takes
away from your time. - Answer-Internal rate of return

Property manager top designation - Answer-certified property manager
CPM

Administrative tasks- collecting rents, prepare monthly reports (who paid who didn't,
what isn't) and record keeping - Answer-property manager tasks

need to know the marketing advantages/disadvantage of property

have low cost and low maintenance amenities that competitors dont have - Answer-
marketing strategy

want similar type of tenants: families w, children. seniors, college
students etc - Answer-tenant selection

may want to add amenities, make sure
everything looks good and is kept up to date - Answer-physical management of facilities

outlines the authority given to the property manager by the
owner - Answer-management agreement

Sign leases
collect rents/ make deposits
pay bills- up to a certain amount
bond an employee
compensation - Answer-property manager authority

Bond an employee - Answer-insurance policy in case of theft by employee

Compensation - Answer-gets a percentage of the gross revenues (have no control over
revenues, ranging from 2-5%)

how long do you plan to stay in home
affordability
interest rates
alternatives used of down payments funds
home prices going up or down
tax consequences of home ownership - Answer-factors of home vs. renting

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