CHOOSE THE BEST answerFROM A, B, C, OR D

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Essentials of Real Estate Investment Eleventh Edition Unit 7 Quiz 1. The costs for holding raw land for investment purposes would NOT include a. opportunity costs. b. taxes. c. mortgage payments. d. depreciation. 2. Your clients are convinced that they can double their money through investment in land. They have indicated that they intend to buy, hold, and then sell after the area surrounding the investment has built up. They intend to buy the land with little down payment. You advise them to carefully consider a. the cost recovery effect on the land. b. replacement value as a factor. c. the holding costs associated with the investment. d. their age in relation to the investment duration. 3. Your investors decide to subdivide land for resale. You advise them that all of the following facts are true EXCEPT that a. this will most likely be an active investment. b. they must joint venture with a partner. c. it will probably require a zoning change. d. it may be necessary to refinance the property. 4. An alternative approach to land investment is a build-to-suit situation. The single MOST important factor in this type of an investment is probably the a. strength of the lessee. b. location of the land. c. size of the proposed building. d. zoning restrictions. 5. When purchasing a lot in a land-promotion subdivision, the buyer should require all of the following conditions to be included in the contract EXCEPT a. a recognition clause from the underlying lender. b. a release clause from the underlying lender. c. an escape clause to be able to cancel the contract anytime during its term. d. an escrow collection to hold the deed to be delivered when the contract is satisfied. Find a vacant site that is for sale on the periphery of your community and analyze its present value using the information in this unit. How does your appraisal compare to its asking price? One paragraph 2016 Kaplan, Inc. May be reproduced for educational uses only