Practice Test Geeks(CMPS) Certified Mortgage Planning Specialist Practice Test
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Real Estate Investment Planning Flashcards

7 cards from real CMPS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Real Estate Investment Planning flashcards as text

  1. A value-add real estate strategy typically involves:

    Answer: Acquiring underperforming properties and increasing NOI through improvements or better management

    Value-add investing targets properties with below-market performance where operational improvements or renovations can increase NOI and value.

  2. Under IRS passive activity rules, rental real estate losses can offset ordinary income up to $25,000 per year only if the taxpayer:

    Answer: Actively participates and has MAGI below $100,000

    The $25,000 rental loss allowance phases out between $100,000 and $150,000 MAGI and requires active participation.

  3. A property is purchased for $400,000 and sold 5 years later for $520,000. Ignoring depreciation recapture, the long-term capital gain is:

    Answer: $120,000

    Long-term capital gain = Sale Price − Purchase Price = $520,000 − $400,000 = $120,000.

  4. Which type of NNN lease structure makes the tenant responsible for property taxes, insurance, AND maintenance expenses?

    Answer: Triple net (NNN) lease

    A triple net lease passes all three expense categories—taxes, insurance, and maintenance—to the tenant, reducing landlord operating risk.

  5. An investor financing a multi-family property wants to minimize the impact of rising interest rates on long-term cash flow. The best strategy is to:

    Answer: Lock in a long-term fixed-rate mortgage at current rates

    A long-term fixed-rate mortgage eliminates interest rate risk by locking in the payment for the life of the loan.

  6. Which property type is generally considered most resilient during economic downturns due to consistent consumer demand?

    Answer: Grocery-anchored retail strip centers

    Grocery-anchored retail benefits from necessity-driven consumer traffic that remains relatively stable even during recessions.

  7. Which term describes the additional yield an investor requires above the risk-free rate to compensate for real estate investment risk?

    Answer: Risk premium

    A risk premium is the excess return demanded by investors for taking on the additional uncertainty of real estate versus risk-free Treasuries.