CHAPTER 17: Real Estate Investments and Business Opportunity Brokerage Flashcards
1
Q
Five types of Real Estate investments
A
- Residential
- Commercial
- Agriculture
- Industrial
- Business Opportunities
2
Q
Define Business risk
A
Degree of variance for PROJECTED INCOME vs EXPENSES
3
Q
Define Financial risk
A
The ability of the property to pay for OPERATING EXPENSES
4
Q
Purchase Power risk
A
Related to INFLATION
5
Q
Interest-rate risk
A
Risk of RISING interest rates
6
Q
Define Liquidity risk
A
Possible loss that may occur if the investment has to be converted into cash quickly
7
Q
Define Safety risk
A
Composed of market risk and risk of default
8
Q
Define Cash flow
A
Total amount of money generated from an investment AFTER expenses have been paid
9
Q
Define Capital gain
A
Is the difference between the adjusted basis of property and its net selling price
