BOMI Asset Management Practice Test

These questions are part of the practice quiz. Start practicing

• Which of the following quantifiable pricing factors best applies to the question, "Does hazardous waste in any form, including asbestos, electrical transformers containing PCBs, or underground fuel storage tanks exist at the property?"
• Which document is critical for securing financing or loan approval when converting REO properties?
• What document outlines the statuses and physical attributes associated with a property?
• What is the definition of cash flow?
• A lease clause that impacts the quality of income and restricts a landlord's ability to pass through or recover operating expenses is a(n):
• What is the standard termination notice practice for owners and management companies?
• A lender who fails to act in a fiduciary manner is acting in which way?
• What is the first step in the foreclosure procedure after a financial setback?
• What is the typical objective of marketing during the property disposition process?
• Market dominance is an investment philosophy focused on ________.
• Which of the following is a primary benefit of diversification in asset management?
• What is the main goal of conducting tenant satisfaction surveys?
• In what context does an asset manager typically assess conflicts of interest?
• An effective asset manager primarily focuses on what aspect of asset stewardship?
• Why does Triana prefer the accrual basis accounting approach?
• Strategies that can be used by asset managers to attract offers for a property in a buyer's market include all of the following except:
• Which identification is used for properties that are owned by the bank after a foreclosure?
• Which of the following is used to communicate to the construction lender the details of how the loan will be paid off?
• Which of the following is not a type of auction that is used to sell commercial real estate?
• Which of the following best describes a cure period?
• Which component is crucial for net operating income calculations but not included in key assessments?
• All of the following are examples of how changes in economic conditions can affect property value except:
• Which of the following does not represent a step taken in a lender's due diligence process?
• What is the primary duty of an asset manager?
• Highest and best use is a concept addressing property value that focuses on answering all of the following questions except:
• Which phase of the audit process involves assessing the soundness of internal controls?
• When examining property value factors created by leasing, which of the following is not included?
• When selecting a property manager, which factor is least likely to be considered?
• Which of the following is not a critical factor considered when converting an REO property to cash or a performing asset?
• What would be a typical demonstrated NOI that Larry should aim for over the mortgage term?
• Which statement about incentive clauses is false?
• Selling a property as-is means no warranties are made about what aspect of the property?
• What is a critical component of financial analysis in asset management?
• All of the following are examples of audits that management firms commonly use except?
• Which of the following is not a lease clause or stipulation that can impact the quantity and quality of income for a given property?
• Which is not a factor in the creation or reduction of value in the leasing process?
• What is a significant risk factor associated with holding REO properties for extended periods?
• Which of the following should not necessarily be included in a market report?
• In the context of asset management, which practice is least likely to enhance the value of a property?
• All of the following are examples of secondary tasks completed by asset managers to preserve collateral value except:
• Which item is most likely not on a property management transition checklist for an asset manager?
• What is the standard timeframe for the foreclosure process to begin after a notice of default is served?
• Which of the following is a benefit of real estate investments for an asset manager?
• Which of the following is an example of a specialty investment strategy?
• What is the term for a formal letter from an auditor that lists deficiencies in a company’s accounting records and controls?
• When conducting stress testing of assets, what is primarily assessed?
• What is the advantage of an asset manager maintaining positive relationships with brokers?
• Which document formally concludes an audit process by presenting the findings?
• The creditworthiness of tenants established using the leasing process impacts the _____ of income as it relates to the property value.
• What characteristic is important in a well-managed property portfolio?
• What is a list of all current tenants and vacant suites within a property called?
• Which of the following loans are used for financing unique, specialized, and/or expensive tenant improvement costs?
• If a property has a net operating income of $120,000 and a desired rate of return of 12%, what is the value of the property?
• How is the basic formula for value expressed?
• Which of the following is true about budgets?
• A market analysis of competitive properties typically excludes which of the following?
• Which factor is not typically considered by an asset manager when resolving an REO property issue?
• What is true about the financial responsibilities of an asset manager?
• All of the following are factors that will affect the timing of a property sale except:
• How does an asset plan contribute to successful property management?
• What is one of the main reasons for including personnel information in an RFP?
• As a contrarian investor, what is Audrey's typical risk profile?
• Which investment consideration primarily focuses on risk management?
• Which option is NOT a key component of net operating income (NOI)?
• The purchase of a tenant in common structure allows for what?
• What is the most important aspect of acquisitions for asset managers?
• What type of information is Glorias collecting to assess a real estate investment market?
• What is Jimmy trying to determine about a property as a buyer?
• In which financial process does an asset manager often conduct formal evaluations of financial integrity?
• With regard to REO properties, which of the following asset manager responsibilities is considered a good practice to remove any stigma that the property may have?
• Hedging against inflation refers to an owner's effort to ________.
• The ownership philosophy focused on purchasing a significant number of assets in a given market that are unique and offer variety in portfolio content may be referred to as ___________.
• With this type of loan, the new, second lender continues to service the first debt, and the borrower makes payment to the new lender for an amount of the first and second loans. What is this type of loan?
• Which of the following is not an approach to determining property value?
• Which type of auditors are contracted by companies for the purpose of ensuring impartiality?
• Which of the following is not usually present on the purchase and sale agreement checklist?
• Which document served as a guide for asset managers regarding property and market evaluation?
• A troubled property is also referred to as a:
• What is the most frequently used document for both the property manager and the asset manager?
• If a U.S. bank or insurance company acquires foreclosed real estate and does not sell it within five years, what may happen?
• When should the first draft of the final purchase and sale agreement be written?
• Which of the following is a critical skill for an effective sales broker in property disposition?
• What is the primary goal of asset management?
• Which of the following is not a cost associated with an as-is sale?
• What term describes the complete written and oral discussion of potential conflicts of interest?
• William, an asset manager, is likely to benefit from positive broker relationships by gaining which of the following?
• When negotiating lease terms, what is a key factor an asset manager should consider?
• What is typically considered a primary factor that can affect property value?
• Which of the following is not a key area that should be reviewed before an acquisition?
• Which cost is typically not incurred when losing a tenant?
• What should be the first focus for an asset manager when dealing with troubled assets?
• Which factor is not usually quantifiable when determining property price?
• Which of the following best describes a property title?
• What is the key purpose of earnest money in a real estate transaction?
• Why must the owner complete an appraisal of a property before selling?
• What action is recommended for enhancing a property's urban appeal?
• Which type of building is characterized by comprehensive amenities, sustainable design, and ample natural light?
• Which of the following describes the document that restates the terms of the lease and further specifies that the lease is valid?
• What should be included in an environmental site assessment to ensure comprehensiveness?
• What term describes a formal review of an organization’s financial records?
• What is an environmental site assessment?
• What does accrual basis accounting assume regarding rent payments?
• What strategy might an asset manager employ to improve property value in urban areas?
• Which information is typically included in an environmental due diligence report?
• _________ is the minimum bid that a seller will accept on the sale of property at an auction.
• Which type of insurance is crucial when managing an REO property?
• Which portion of the asset management plan includes strategic goals for the property?
• Why should asset managers monitor progress of assets?
• Which of the following responsibilities is not included in an asset manager's job?
• During which stage of the property sale process does due diligence occur?
• Which of the following terms describes that, for comparable goods, the product with the lowest price will enjoy the highest level of demand and widest distribution?
• What is the financial outcome an asset manager ultimately aims to achieve through effective management?
• Asset managers aim to achieve which of the following?
• In determining the price of real estate, which aspect is typically quantifiable?
• If Mark's property has $850,603 in gross potential income and $72,000 in vacancy loss, what is the NOI after accounting for $45,018 in operating expenses?
• Commissions to brokers should be paid promptly to encourage what?
• The fundamental economic principle used in property valuations that refers to the ability to render or service a product that satisfies demand is:
• Which type of property management firm typically forms networks with similar firms across different markets?
• Which characteristic is NOT associated with a top-tier property management firm?
• What best describes the term securitization?
• Which of the following terms describes funds committed to the seller by the buyer to purchase real property?
• Asset managers seek to match owner objectives and property needs in which part of the asset plan?
• Which of the following indicates that a property's title is free and clear of all judgments, liens, loans, or actions at the moment preceding the funding of the new loan?
• Which term describes issues that come up with regards to title and title insurance?
• In discounted cash flow (DCF) analysis, a higher discount rate results in which of the following?
• Which of the following is essential for a successful negotiation when selling an REO property?
• What happens if an asset manager fails to meet fiduciary duty?
• Long-term appreciation is an ownership objective that refers to ________.
• What type of lease only requires the tenant to pay base rent without any additional rent or operating expenses?
• What is the formula for net operating income (NOI)?
• Which of the following is a key statistic for understanding a local real estate market?
• Which of the following is considered a yardstick for evaluating the financial attributes of investments?
• Obtaining a loan pre-approval is an effective method used by buyers to:
• Bankruptcy code is considered what type of law?
• Which of the following is not a factor that owners need to consider when turning an REO into a performing asset?
• Which of the following is used to identify trends in average wages that have a direct correlation to retail sales?
• Which of the following describes a loan type initially meant to stimulate development activity and relieve economic hardship?
• Which of the following is not a due diligence activity performed by a buyer prior to purchasing a property?
• What does Harvey need to establish the date, location, and subject of an audit?
• Items that are evaluated in determining the costs of a property sale include all of the following except:
• How many competing properties should Betty generally evaluate in a market analysis?
• What is a common approach to managing maintenance issues in REO properties?
• Which type of investment structure allows for more than one investor's participation in a property?
• The purchase and sales agreement is a critical component of what phase in the property disposition process?
• What would Yuri's fee be if he manages a firm's $20,000,000 portfolio with a fee of 50 basis points?
• The process used by lenders to determine the financial strength of a property is known as what?
• What is the effect of a higher discount rate in property valuation?
• Which function is NOT typically performed by asset management software?
• What aspect is NOT included in a physical property review as part of an asset management plan?
• Which aspect is essential when conducting a property valuation?
• When preparing for an asset audit, which approach is least effective?
• Which statement about the monthly reporting package is inaccurate?
• Who does a tenant representative like Janelle owe fiduciary responsibility to?
• Which audit is most important to complete in order to verify the credibility of the information that determines a property value?
• The formula for net absorption is defined as the total square feet leased during a period, minus the square feet in leases expired, terminated, or defaulted, minus the square feet of new construction, plus what?
• Discounted price, repair/improvement, and bonding policy are all costs associated with:
• A diverse portfolio allows for what due to investment and business cycles?
• An example of an item that may appear in the capital budget portion of an asset plan is:
• Who is responsible for making sure that no payment deadlines are missed?
• Which of the following pieces of information would not be included in a preliminary title report?
• An asset manager must be proficient in combing an owner's objectives with:
• The goal of property management should primarily focus on ________.
• A highly leveraged investment is one that has a _____ or greater loan-to-value ratio.
• Which of the following is not a common form of ownership?
• Who in a leasing team is primarily responsible for soliciting, negotiating, and closing business deals?
• Why is it critical for asset managers to keep track of leasing team performance?
• Which of the following criteria is essential in determining the highest and best use of a property?
• Which of the following is not a primary task completed by an asset manager to protect collateral value?
• In a lease structured with no rent for the first two years, who generally benefits from this arrangement?
• When assessing the value of an REO property, which approach focuses primarily on comparable property sales?
• Which of the following is not a common strategic marketing focus?
• Which of the following terms describes the most profitable price as of a specific date?
• As an asset manager, what is Brenda’s main concern regarding property value?
• Which of the following is not a legal document reviewed during an asset manager's current property status evaluation?
• What value should Tonette determine for an REO property?
• What finance-related factor is typically evaluated during a lender's due diligence?
• Advising tenants of changes, requesting that utility companies prorate charges to the day of closing, and ensuring a smooth transition to a new owner of property is the responsibility of:
• Which item is NOT a key factor when transitioning property management?
• What is the primary effect of CERCLA and SARA in the US regarding property owners?
• Which of the following factors is not generally analyzed by an asset manager when assessing market conditions?
• Which activity can be considered an enhancement strategy for asset managers?
• In a five-year lease where a tenant pays above-market rates after the first two years, what financial impact does this often have on the owner?
• What is an important document that indicates a borrower's lack of repayment in the foreclosure process?
• Which of the following is not one of the basic steps in the foreclosure process?
• What is the term for public notices related to a pending lawsuit affecting a property?
• What is an informal feedback mechanism from the auditor that focuses on areas of concern developed through the audit process?
• A significant factor in determining the success of an asset manager is their ability to ________.
• How would a 15-year-old building be classified?
• The three types of capital improvements that may be approved by an asset manager if a decision is made to hold a property include all of the following except:
• What is a key function of an asset manager when it comes to increasing property value?
• What is the term for a deed that includes covenants of title?
• Who do asset managers have direct management responsibility for?
• What is used to develop a positive working relationship with the staff of a company being audited?
• Which method is typically employed by asset managers to enhance the marketability of an REO property?
• Which financial metric is critical for assessing real estate investment performance?
• In property valuation efforts, which principle is NOT included in Brewster's analysis?
• What is the term for the process of gathering data needed for an audit?
• Due diligence is initiated by the __________ once the offer to purchase has been accepted?
• Which of the following is true about due diligence regarding the physical plant?
• Which of the following is not a task completed by a broker once the terms and conditions of the sale are finalized?
• Being aware of how your tenants are using their space and being proactive prepares you to implement which of the following non-traditional income sources?
• How frequently should asset managers monitor their budget-versus-actual reports?
• Who is typically responsible for conducting the property appraisal before a sale?
• The _______ approach to valuing property emphasizes the sale of comparable properties.
• A property with a very low discount rate is likely to have what kind of value and risk profile?
• It is important to evaluate demographics _________ making an investment commitment.
• The optimal use of a property resulting in the greatest net income for a particular asset is referred to as its:
• Sanjay, as an auditor, is responsible for ensuring compliance with management policies. What type of auditor is he?
• What should property managers identify when creating annual budget projections?
• Which of these best represents an asset manager's focus when compiling a market analysis?
• What is the book value of a property purchased for $5M with capital improvements of $1M and other financial specifics laid out in the scenario?
• Effective asset managers use all of the following to establish effective communication between themselves and owners, except:
• Which legislation was passed in response to pension-fund problems during the 1960s?
• What is one of the primary challenges for asset managers in fluctuating markets?
• How often is it generally best for an asset manager like Barbara to receive her comprehensive reporting package?
• The review of a current property budget would be done in which part of the due diligence process?
• Which of the following is not a verifiable cost that would appear on the operating statement?
• Which of the following is described as the difference between the interest paid to borrow money and the rate of interest that could have been earned for making low-risk investments?
• Condition of property, amount and cost of deferred maintenance, and refurbishment of property are all factors that affect:
• For asset management, what is a common practice in evaluating property investments?
• What is the primary goal of highest and best use analysis?
• What is a common goal of property managers as it relates to asset management?
• What is a major consideration when evaluating a building's sustainability?
• What is the final step in the ownership cycle of investment real estate?
• What factor is NOT typically considered by an asset manager when selecting a property management firm?
• Which of the following terms describes an agreement in which one party consents to protecting the other from loss and paying for the other party's losses?
• Which of the following groups does not have a primary relationship with asset managers?
• A _________ shows the boundaries of a property and where the footprint of the building is on the land being purchased.
• How is the fit of a property into the overall market determined?
• If Jeanine wants a loan with a constant interest rate, it is classified as a _________ loan.
• Which of the following is not an example of economic statistics for market analysis?
• Which criterion is NOT needed when assessing a property's highest and best use?
• A detailed report that assesses competitive properties usually includes:
• Which of the following is not a benefit of direct digital control thermostat systems?
• What motivates many investors to seek properties that offer pride of ownership?
• What is the most important aspect of property disposition for an individual selling their property?
• Which of the following gives the asset manager a regular update on the financial results of a property?
• Important aspects of the property disposition process include all of the following except:
• Who benefits from a co-tenancy clause?
• What information should asset managers not request from brokerage firms?
• What identifies permissions requirements for changes and/or improvements to a property?
• The ownership documents are part of which aspect of an asset management plan?
• Which of the following is NOT a common element in a monthly reporting package?
• What is the yield of a property that has a net operating income of $180,000 and a value of $2,400,000?
• What does the term 'vacancy/credit loss' refer to in net operating income?
• Which strategy is typically employed by asset managers to evaluate property performance?
• What must an asset manager consider regarding conflicts of interest?
• What is the main goal of conducting market research on REO properties?
• Which option is not an example of a social or environmentally responsible investment cause?
• Which of the following is not a common method of producing more income?
• What is the goal of a market analysis conducted by an asset manager?
• What term is used to describe a property's potential to generate income?
• Reviewing the purchase agreement, confirming the title and the seller's ability to convey the property, and confirming closing documents are all responsibilities of:
• Which of the following describes a loan type where the interest rate is set at an established level and does not change over the term of the loan?
• What type of loan pays a rate of interest below market value but includes a payment to the lender of some form of appreciation?
• What is the primary role of an asset manager related to property performance?
• What is the term for a written agreement from a title insurance company to issue a policy to both the buyer and the lender?
• What is a fundamental step before finalizing a property purchase?
• What primary factor influences investors to adopt a pride of ownership investment strategy?
• All of the following are examples of marketing functions carried out during the property disposition process except:
• How is the basic formula for yield expressed?
• What is an audit opinion?
• Which of the following is true about asset managers' responsibilities in regard to disability legislation?
• Which of the following individuals are not typically used on a consultant/contractual basis?
• What role does the internal rate of return (IRR) play in investment evaluations?
• Which of the following actions can asset managers take to improve asset performance?
• The appraisal required by a lender defines the _______ value of a property.
• Brenda's responsibility as an asset manager includes maintaining what aspect of property value?
• What type of responsibility does Henri have towards the property owner as an asset manager?
• During the due diligence process, what is Vern's key responsibility as an asset manager?
• What aspect is crucial when analyzing comparable properties?
• Most asset management companies are compensated based on what?
• Which of the following best describes the term "staging" in the context of REO property management?
• What typically triggers the closing of a real estate transaction?