Real Estate Principles - A Value Approach Study Guide Graded A+

Which of the following statements is false? {Ans: A) Tax losses on active income can be used to offset positive portfolio income B) Tax losses on portfolio income can be used to offset positive active income C) A loss on the sale of real estate stock can be used to offset a positive gain on the sale of a corporate bond D*) Net passive activity losses can be used to offset dividend income from a real estate stock}Assume a retail shopping center can be purchased for $5.5 million. The center's first year NOI is expected to be $489,500. A $4 million dollar loan as been requested. The loan carries a 9.25% fixed contract rate, amortized monthly over 25 years with a 7-year term. What will be the property's (annual) debt coverage ratio in the first year of operations? {Ans: A) 1.40 B*) 1.19 C) 0.84 D) 0.08}For non-real estate corporations, which of the following is not a potential advantage of a real estate sale-leaseback? {Ans: A) The firm can convert an illiquid asset into cash B) More of the firms capital can be invested in its core business C*) The firm benefits from property appreciation that occurs