Chapter 11 Name_____________________________________
Section 11.1 (Worksheet 2) – Real Estate Investment
1. With indirect real estate investments such as real estate syndicates, real estate investments trusts, high-risk
mortgages, and participation certificates, a trustee is appointed to hold legal title to the property on behalf
of who? (1 pt)
2. What are the four types of indirect real estate investments? (2 pts)
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3. Explain what a syndicate is. (1 pt)
4. What are the three ways a syndicate can be organized? (3 pts)
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5. Explain how a limited partnership works. (1 pt)
6. When you are a limited partner of a syndicate, what are you liable for? (1 pt)
7. What are two advantages that a real estate syndicate offers you and your partners? (2 pts)
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8. How is a Real Estate Investment Trust (REIT) much like a mutual fund, and how is it different? (2 pts)
9. Define each of the three following types of REITs. (3 pts)
Equity REIT:
Mortgage REIT:
Hybrid REIT:
10. According the federal government regulations, REITs are required to: (4 pts)
o Distribute at least ….
o Avoid investing in…..
o Hire independent real estate professionals to ……
o Have at least…..
11. Why do those who invest in high-risk mortgages have the chance to receive a high rate of return on
their investment? (1 pt)
12. Briefly explain each of the following advantages of real estate investments. (4 pts)
Hedge Against Inflation -
Easy Entry -
Limited Financial Liability -
Financial Leverage -
13. Briefly explain each of the following disadvantages of real estate investments. (5 pts)
Illiquidity -
Declining Property Values -
Lack of Diversification -
Lack of a Tax Shelter -
Management Problems -