Chapter 6 - Funding - A

What is the main challenge of building a real estate portfolio?

• Finding properties to buy

• The high cost of properties

• Avoiding all risks

• Managing tenants

What does “financing” refer to in real estate?

• Managing property operations

• How you pay for a deal

• Selling a property

• Calculating returns

What are the two main categories of financing options?

• Cash and credit

• Equity and debt

• Loans and grants

• Partnerships and savings

In real estate financing, what does “equity” represent?

• Borrowed money

• Ownership stake

• Operating expenses

• Interest payments

What is an “all-cash deal” in financing terms?

• Using 100% debt

• Using 100% equity

• Borrowing from partners

• Avoiding ownership

What is “debt” in the context of real estate financing?

• A loan from a lender

• Cash from personal savings

• Equity from partners

• Profit from a sale

What is a common form of debt financing in real estate?

• Partnerships

• Mortgages

• Cash reserves

• Stock investments

What advantage does debt financing offer over equity financing?

• It avoids all interest payments

• It retains full ownership

• It requires no down payment

• It eliminates risk

What must an investor provide to secure a loan?

• Full ownership

• Some equity as a down payment

• No personal capital

• A partner’s guarantee

What is the “loan-to-value ratio” (LTV)?

• The percentage of equity in a deal

• The ratio of debt to the property’s value

• The total cost of closing

• The investor’s profit margin