TEXAS SAE REAL ESTATE INVESTMENT 2 LATEST VERSIONS (VERSIONS A & B) 2024 ACTUAL EXAM 200 REAL EXAM QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS ALREADY GRADED A+)

TEXAS SAE REAL ESTATE INVESTMENT 2 LATEST VERSIONS (VERSIONS A & B) 2024 ACTUAL EXAM 200 REAL EXAM QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS ALREADY GRADED A+)

Steven put down $10,000 toward a property's purchase price, financed the rest, and now has a cash flow of $2,800 after repairs and debt service. What's his ROI?

a 21%
b 26%
c 28%
d 32% - Answer-c 28%

Return on investment or ROI = cash flow ÷ cash investment. $2,800 ÷ $10,000 = 28%.

What's a legal agreement or promise made between two parties?

a. A consideration
b. A covenant
c. A handshake
d. A negotiation - Answer-b. A covenant

A legal agreement or promise made between two parties is a covenant.

Which type of commercial property offers parking surrounding the outside of the property, but also indoor parking beneath the building?

a. Community shopping center
b. Neighborhood shopping center
c. Regional shopping center
d. Strip store - Answer-c. Regional shopping center

**Regional shopping centers are usually enclosed, with stores facing inward and connected by a common walkway. Parking is available surrounding the outside of these centers, although some have indoor parking beneath the building, as well.

During the option period to renew a lease, who determines whether the option will be exercised?

a. Either the landlord or the tenant can make the decision.
b. It must be mutually agreed to by both the landlord and the tenant.
c. The landlord makes the decision.
d. The tenant makes the decision. - Answer-d. 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).

Gary leases a commercial building and pays all expenses related to the building, including taxes and insurance. Gary has a ______.

a. Gross lease
b. Net lease
c. Percentage lease
c. Sublease - Answer-b. Net lease

**With a net lease, the tenant pays some, or all (in the case of a triple net lease), expenses.

Which of these is a static risk?

a. A decline in economic conditions in the area
b. Change in tax code
c. Fire damaging the building
d. Market change - Answer-c. Fire damaging the building

**Static risks are those where the effect can be lessened with insurance. This includes vandalism, theft, fire, and accident liability.

How many dwelling units does a multi-family residential property have?

a. Five or more
b. More than one but fewer than six
c. One to four
d. Two or more - Answer-d. Two or more