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Real Estate Investing Cheat Sheet 2026

The 30 highest-yield Real Estate Investing facts, distilled from real exam questions. Print it, save it as a PDF, or study it here β€” free, no sign-up.

50 questions
60 min time limit
70% to pass
  1. Which maintenance approach focuses on fixing equipment or systems only after they break down? β†’ Reactive maintenance
  2. An investor is evaluating a property in a flood zone. Which federal program provides standardized flood insurance for properties in participating communities? β†’ National Flood Insurance Program (NFIP)
  3. An investor performing sensitivity analysis on a rental property varies the exit cap rate assumption. Why is this important? β†’ Small changes in exit cap rate can significantly alter projected sale proceeds and IRR
  4. A landlord wants to convert a rent-controlled apartment building to condominiums. Under most local ordinances, this requires: β†’ A conversion permit and often relocation assistance for displaced tenants
  5. The Gross Rent Multiplier (GRM) is calculated by: β†’ Dividing the property's purchase price by annual gross rent
  6. What does a property management agreement typically specify? β†’ The scope of services, fee structure, authority limits, and termination terms
  7. What document should a property manager provide to tenants that outlines rules for common areas, noise policies, and parking regulations? β†’ Tenant handbook or rules addendum
  8. What is the primary purpose of conducting a Phase I Environmental Site Assessment before purchasing an investment property? β†’ To identify potential environmental contamination liabilities
  9. What is a common clause in a residential lease that limits the landlord's obligation if the property becomes uninhabitable due to an act of God? β†’ Force majeure clause
  10. An investor uses a 1031 exchange after selling a rental property. What is the primary benefit? β†’ Defers capital gains taxes by reinvesting proceeds into a like-kind property
  11. For a married couple filing jointly, what is the capital gains exclusion on the sale of a primary residence under IRC Section 121? β†’ $500,000
  12. Which IRS form is used to report rental real estate income and expenses? β†’ Schedule E
  13. Which IRS form is used to report rental income and expenses for residential rental property? β†’ Schedule E
  14. Which metric would a multifamily investor examine to assess whether a market is vulnerable to rent declines due to oversupply? β†’ Apartment units under construction as a percentage of existing stock
  15. When the 10-year Treasury yield rises significantly, what is the typical short-term effect on cap rates? β†’ Cap rates tend to expand upward
  16. What is the net investment income tax (NIIT) rate that may apply to rental income for high-income taxpayers? β†’ 3.8%
  17. Which of the following is considered a Fair Housing Act protected class under federal law? β†’ National origin
  18. What does a 'prepayment penalty' on an investment property loan protect? β†’ The lender against loss of expected interest income when a loan is paid off early
  19. Which approach to value is most commonly used by appraisers for income-producing properties? β†’ Income approach
  20. Which provision allows small landlords to deduct up to 20% of qualified business income from pass-through rental activities? β†’ Section 199A deduction
  21. What is tenant concentration risk in commercial real estate investing? β†’ The risk that a large portion of rental income depends on one or a few tenants
  22. When using the cost approach, which type of depreciation accounts for losses in value due to outdated floor plans or design features? β†’ Functional obsolescence
  23. In a highest and best use analysis, which of the following criteria must a proposed use meet? β†’ Legally permissible, physically possible, financially feasible, and maximally productive
  24. Which loan metric compares a property's net operating income to its annual debt service payments? β†’ Debt service coverage ratio
  25. In a comparative market analysis (CMA), which factor would LEAST likely affect the adjusted value of a comparable property? β†’ The original purchase price paid by the comparable property's seller
  26. A DSCR loan qualifies a borrower primarily based on: β†’ The property's rental income relative to its debt payments
  27. During which phase of the real estate market cycle do vacancy rates typically peak and rental concessions become most common? β†’ Recovery
  28. What is the primary purpose of a 'title search' when purchasing an investment property? β†’ To identify any liens, encumbrances, or ownership disputes on the property
  29. A 'debt service coverage ratio' (DSCR) falling below 1.0 during a market downturn signals: β†’ The property's income no longer covers its debt obligations
  30. Which of the following best describes the Internal Rate of Return (IRR) for an investment property? β†’ The discount rate at which the NPV of all cash flows equals zero
Turn these facts into recall:
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