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Wall Street Prep real estate technicals Exam Questions and Answers 100% Pass
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Wall Street Prep real estate technicals Exam Questions and Answers 100% Pass What are the different types of real estate firms? - REPE, REITs, RE development, RE investment management, RE operating companies, RE brokerage REPE - raise capital from the funds LPs to invest in RE (buy, develop, ma...

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  • December 5, 2024
  • 12
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • wall street prep real estate technicals exam quest

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Wall Street Prep real estate technicals Exam
Questions and Answers 100% Pass


What are the different types of real estate firms? - ✔✔REPE, REITs, RE development, RE investment

management, RE operating companies, RE brokerage


REPE - ✔✔raise capital from the funds LPs to invest in RE (buy, develop, manage, sell)


REITs - ✔✔own portfolio of income generating RE assets. 90% of taxable income must be paid in

dividends. Most are publicly traded


RE development - ✔✔construct properties from scratch. Lifecycle of property is longer than other types

of RE firms


REIM - ✔✔raise capital from LPs to acquire, develop, and manage to then sell them for a profit. Different

from REPE bc funds have no end date


RE operating companies - ✔✔Similar to REITs but have to reinvest earnings, not pay out dividends. If

they don't, they are subject to double taxation at firm and shareholder level


RE brokerage - ✔✔intermediaries that facilitate transaction on both sides (buy/sell/lease). Identify

opportunities to buy/sell on behalf of client or negotiate lease terms as a representative.


What are the different property classes in real estate investing? - ✔✔Class A, B, C, D


Class A - ✔✔premium modern properties in prime locations with top of the line amenities. Lowest risk

and lowest return


Class B - ✔✔slightly outdated but are built/renovated with high quality construction and maintained

well. Demand comes from higher end middle class. Higher yield with upside potential from investors.


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, Class C - ✔✔Outdated (30+ years old) located in sub-optimal areas. Conditions range from fair-poor and

usually require urgent repair/renovations. Tenants=low income/low creditworthiness=higher

risk=higher upside for investors.


Class D - ✔✔Botton tier, distressed assets usually located in areas with collapsing market demand (lowest

rent, high crime). Require a lot of spending on renovation. Most investors avoid unless destressed assets

specific investor.


What are the four main real estate investment strategies? - ✔✔core, core-plus, value add, opportunistic


Core - ✔✔most conservative with least risk=low return (class A). Appeal to investors who want

stable/consistent returns.


Core-plus - ✔✔low to moderate risk which aims to obtain income and growth. Requires capital for

improvements to increase cash flow and improve operating efficiency


Value-add - ✔✔growth oriented with moderate to high risk. requires considerable capital improvements

and located in sub-optimal areas. Aim to create more value resulting in growth-higher rent prices and

increased demand


Opportunistic - ✔✔most risky and are most complicated and time consuming projects. Initially produce

little/no cash flow but can potentially generate significant cash flow after fully developed


What is the real estate capital stack? - ✔✔"capitalization," describes the different sources of funding used

to finance a real estate project (common equity, preferred equity, mezzanine debt, senior debt).


Common equity - ✔✔riskiest in security bc claim comes last if default


Preferred equity - ✔✔blends debt and common equity=hybrid security. Returns=flexible bc they can be

fixed interest with option to participate in equity upside.




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Crafted for Academic Insight by KatelynWhitman. All rights reserved © 2025

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