Real Estate 306 Exam 1 Questions and
Answers
Real Estate
✓ ~~~ Land and any improvements on it. Can be thought of as a bundle of legal rights or a
bundle of assumptions.
Commercial Real Estate
✓ ~~~ Refers to income-producing properties as opposed to single-family homes, which is
referred to as residential real estate.
Asset
✓ ~~~ A useful or valuable thing such as real estate.
Asset Class
✓ ~~~ A grouping of a similar type of investment.
Tangible
✓ ~~~ Describes something that you can touch.
Illiquid
✓ ~~~ Buildings being difficult, or taking a long time to sell and transact.
Lease
✓ ~~~ A contract by which one party conveys the use of land or space in a building to
another for a specified time in return for periodic payment/rent.
Credit Tenant
, ✓ ~~~ A term used to describe a tenant's financial strength and thus the likelihood that
they will make payments.
Revenue
✓ ~~~ Income in the form of rent payments.
NIMBY
✓ ~~~ Not in my backyard, refers to pushback some developers receive from the
neighboring community.
YIMBY
✓ ~~~ Yes in my backyard, the neighboring community that supports development or
density.
Capital
✓ ~~~ Money, typically in the form of debt or equity.
Equity
✓ ~~~ Invested money that is typically not guaranteed, but results in more reward for the
investor. Also refers to the owner or group of owners in real estate.
Debt
✓ ~~~ Borrowed money that must be returned with a predetermined interest rate that is
typically guaranteed by the developer.
Return of Capital
✓ ~~~ Describes when the investor receives back the money that was originally invested.
Return on Capital
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