Real Property Investment I

Question 1

Pro Forma

Answer 1

An income statement where certain amounts are hypothetical, such as the anticipation of lease income under certain circumstances or if certain events occur

Question 2

Possessory Interest

Answer 2

An interest in property that entitles the holder to possess and occupy the property, now or in the future; an estate, which may be either a freehold or leasehold

Question 3

Leasehold Estate

Answer 3

An interest that gives the holder, the tenant, a temporary right to exclusive possessions of the estate, without title.

Question 4

Freehold Estate

Answer 4

A possessory interest in real property of uncertain/unlimited duration; an ownership estate in real property; either a fee simple or life estate. holder of freehold estate has title

Question 5

1031 Exchange

Answer 5

internal revenue code section that allows a taxpayer to sell an investment property and purchase another investment property in its place without paying taxes on the proceeds from the sale

Question 6

T/F

Immobility increases the value of land in a good market

Answer 6

True - land cannot be moved helps increase its value in a good market b/c other land can’t be moved in to offer more choices for potential customers

Question 7

Capital Growth

Answer 7

an investment that will appreciate in value

Question 8

Space Market Risk

Answer 8

Risk that demand for space will affect rents, vacancy rates, and net operating income.

Question 9

Fee simple estate

Answer 9

Greatest interest in a parcel of land that one can possibky own