#1
Which of the following is a common form of innovative real estate financing?
Mortgage-backed securities
ExplanationSecurities backed by mortgages, allowing investors to participate in real estate debt.
#2
What is crowdfunding in real estate financing?
Pooling funds from multiple investors for a real estate project
ExplanationCollecting capital from multiple investors for real estate ventures.
#3
What is a 'REO property' in real estate financing?
Real Estate Owned property by a financial institution
ExplanationProperty owned by a lender after unsuccessful sale at foreclosure auction.
#4
What is 'Seller Financing' in real estate?
A method where the seller acts as the lender and finances the purchase
ExplanationSeller providing financing, acting as the lender in the property transaction.
#5
What does the term 'REIT' stand for in real estate financing?
Real Estate Investment Trust
ExplanationA company that owns, operates, or finances income-generating real estate.
#6
What is a 'Sale-Leaseback' arrangement in real estate financing?
A sale followed by a leaseback to the seller
ExplanationSelling property and leasing it back to the original owner.
#7
What is a 'Hard Money Loan' in real estate financing?
A loan secured by a hard asset like real estate
ExplanationLoan backed by the value of a tangible asset like real estate.
#8
What is the primary function of a bridge loan in real estate financing?
To provide temporary financing until permanent financing is obtained
ExplanationShort-term loan to cover financing gaps until long-term funding secured.
#9
What is the main advantage of a joint venture in real estate financing?
Lower risk due to shared responsibilities
ExplanationRisk reduction and resource sharing among partners.
#10
What is the primary benefit of a mezzanine loan in real estate financing?
Higher loan-to-value ratio
ExplanationLoan providing a higher percentage of project financing.
#11
What are 'CMBS' in real estate financing?
Commercial Mortgage-Backed Securities
ExplanationSecurities backed by commercial mortgages, traded in the financial market.
#12
What is the primary difference between a recourse loan and a non-recourse loan in real estate financing?
Recourse loans allow borrowers to walk away from debt, while non-recourse loans do not
ExplanationRecourse loans permit borrowers to abandon debt, while non-recourse loans do not.
#13
What is a 'Participation Mortgage' in real estate financing?
A mortgage where the lender shares in the income generated by the property
ExplanationMortgage where the lender participates in the income generated by the property.
#14
What is a 'Ground Lease' in real estate?
A lease of land only, with the tenant responsible for building construction
ExplanationLeasing land without structures, with tenant responsible for construction.