## InAgent Final Exam

Step 1 of 23

## This is a 60 question quiz.

**You will need to get 45 questions correct to pass with a 75%.**

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**1. Name the 8-key profit centres in rental real estate investors benefit from.(Required)
Rent, Mortgage Paydown, Appreciation, Property Management, Location, Cash Flow, Leverage, Capital Gains
Rent, Refinance, Mortgage Paydown, Capital Gains, Taxes, Instant Equity, Appreciation, Cash Flow
Mortgage Paydown, Forced Appreciation, Refinance, Leverage, Depreciation, Instant Equity, Appreciation, Cash Flow
Mortgage Paydown, Capital Gains, Instant Equity, Cash Flow, Leverage, Appreciation, Depreciation, Forced Appreciation
2. Considering a common/typical rental property scenario, choose the actions an investor can implement to increase the ARV on a rental property.(Required)
Forced Appreciation
Increasing rental income
Refinancing
Paying down the mortgage balance
A & B
A & C
A & D
3. What is the minimum down payment amount allowed on a $1,296,000 purchase of a non-owner occupied triplex for a buyer with good credit.(Required)
$324,000
$64,800
$259,200
$129,600
4. Monoline lenders often offer advantages over many banks. Pick the most correct answer. Monoline lenders:(Required)
Offer discounted mortgage rates, alternative investment options and better exit penalties on fixed mortgages than banks.
Offer discounted mortgage rates, provide loans to high-risk borrowers and ensure their mortgages with insurance from one of Canada’s three mortgage insurers.
Offer lower rates, provide loans to higher risk borrowers and better exit penalties on fixed rate mortgages than banks.
Offer discounted mortgage rates, better exit penalties on fixed rate mortgages than banks and ensure their mortgages with insurance from one of Canada’s three mortgage insurers.
5. Calculate the total amount of capital available for an investor to ‘pull out’ of the following non-owner-occupied triplex example using a 75% LTV new mortgage. Current mortgage balance: $ 768,520 Appraised value: $1,105,500(Required)
$829,125
$60,605
$276,375
$492,145
6. What mortgage rate would be used in a variable mortgage considering the prevailing 2.45% prime rate if the rate offered was P-55%.(Required)
1.90%
2.55%
3.00%
1.85%
Purchase: $985,900

20% DP: $ 197,180

Mtg. Amt: $788,720

Rate: 2.59%

Mtg Pmt: $ 3,568.65/mo.

Taxes: $ 4248

Insurance: $ 1,740

Heat: $120/mo.

Gross Family Income: $165,7707. Calculate the GDSR with the following triplex rental property purchase example above.(Required)
30.31%
29.26%
27.05%
33.21%
Student loan: $240.62/mo.

Credit card: $413.85/mo.

Car lease: $675.73/mo.

Car Loan: $645.05/mo.

LOC: $332.95/mo.

Rental Income: $4,125/mo.8. Calculate the TDSR on same triplex. Utilize the elements above and include a 50% addback to income component in your calculation:(Required)
35.40%
36.21%
40.91%
40.00%
9. Calculate the TDSR on the same triplex using 50% rental offset.(Required)
31.04%
27.01%
32.09%
27.92%
10. When a client is in the mortgage qualification underwriting process for purchasing a rental property and a principal residence is factored in to the TDSR calculation, which factors are commonly excluded from the rental property when calculating the TDSR?(Required)
Insurance and taxes
Heat and taxes
Insurance and condo fees
Condo fees and credit card debt
11. Identify the 4 key macro-economic factors discussed which are important to a real estate investor.(Required)
Demographics, sales data, supply & demand, population growth
Market trend, infrastructure, vacancy rate, population growth
Unemployment rate, market trend, vacancy rate, population growth
Market trend, unemployment rate, supply & demand, population growth
12. What is the most common minimum credit score needed to get approved for a mortgage with most ‘A’ lenders in Canada?(Required)
680
720
640
620
13. What are the set of parameters required by a real estate agent to understand each investor’s investment goals, timelines and capacity to purchase?(Required)
Market trends
Demographics
Investor criteria
Market data
14. Of the 8 factors discussed regarding potentially paying higher premiums for insurance on a rental property, which one is missing from the following list:(Required) Single pane windows, unlocked doors or windows, water supply valve left on, knob & tube wiring, baseboard heating, wood burning fireplace, wood burning stove.
Roof leak
60 days vacant
Property in a bad area of town
Leaky basement

Use the following factors in your calculations.

Market Price: $1,500,000

Purchase Price: $1,400,000

20% Downpayment: $ 280,000

Initial Mortgage Balance: $1,120,000

5 year Fixed – Interest Rate: 2.39%

Amortization: 25 year

Inspection: $ 1,100

Land/Prop. Transfer Tax: $ 24,475

Legal/Conveyancing: $ 1,650

Renovation: $ 25,000

Insurance: $ 3,342 annual

Property Mgt: $ 644/mo.

Property Taxes: $ 5,466 annual

Utilities: $ 3,414 annual

Maintenance: $ 412.50/mo.

Vacancy: $ 412.50/mo.15. What is the monthly cashflow?(Required)
$918.78
$ 806.42
$624.58
$504.85
16. What is the Cash-on-Cash Return after year 1?(Required)
3.45%
4.62%
2.91%
1.19%

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17. What is the amount of principal paid after year 1?(Required)
$26,275.38
$59,472.91
$33,197.52
$1,086,802.48
18. What is the ROI after year 1?(Required)
12.91%
8.67%
14.91%
11.67%
USING THE SAME EXAMPLE:

4 Unit Property Example:

Use the following factors in your calculations.

Upfront Costs

Market Price: $1,500,000

Purchase Price: $1,400,000

20% Downpayment: $ 280,000

Initial Mortgage Balance: $1,120,000

5 year Fixed – Interest Rate: 2.39%

Amortization: 25 year

Inspection: $ 1,100

Land/Prop. Transfer Tax: $ 24,475

Legal/Conveyancing: $ 1,650

Renovation: $ 25,000

Expenses:

Insurance: $ 3,342 annual

Property Mgt: $ 644/mo.

Property Taxes: $ 5,466 annual

Utilities: $ 3,414 annual

Maintenance: $ 412.50/mo.

Vacancy: $ 412.50/mo.

Monthly Gross Income: $ 8,250/mo.19. What is the total principal paid after 5 years?(Required)
$297,364.53
$174,163.46
$123,201.07
$36,507.17
20. What is the ROI after 5 years?(Required)
42.98%
51.55%
58.31%
55.34%
USING THE SAME EXAMPLE:

4 Unit Property Example:

Use the following factors in your calculations.

Upfront Costs

Market Price: $1,500,000

Purchase Price: $1,400,000

20% Downpayment: $ 280,000

Initial Mortgage Balance: $1,120,000

5 year Fixed – Interest Rate: 2.39%

Amortization: 25 year

Inspection: $ 1,100

Land/Prop. Transfer Tax: $ 24,475

Legal/Conveyancing: $ 1,650

Renovation: $ 25,000

Expenses:

Insurance: $ 3,342 annual

Property Mgt: $ 644/mo.

Property Taxes: $ 5,466 annual

Utilities: $ 3,414 annual

Maintenance: $ 412.50/mo.

Vacancy: $ 412.50/mo.

Monthly Gross Income: $ 8,250/mo.21. Based on a 3% year over year appreciation increase to the initial market price, what is the projected property value at year 5? (no need for decimals)(Required)
$1,622,983
$1,680,947
$1,738,911
$1,728,411
22. What is the ‘Deluxe ROI’ after 5 years?(Required)
127.25%
157.35%
92.35%
122.45%
23. Based on the 5-year value in question 21, and based on a refinance at 75% LTV of that value, what is the maximum capital amount available to be ‘pulled out’ of the deal? (No need for decimals)(Required)
$358,346
$271,400
$314,873
$350,471
24. Based on your answer from question 23, how much money is still in the deal or in the investor’s pocket?(Required)
$60,825 left in the deal
$18,246 in the investor’s pocket
$26,121 in the investor’s pocket
$17,352 left in the deal
25. For a homeowner to refinance or get a HELOC, there are steps to determine whether the homeowner can qualify and whether the property has enough equity. Which of the following answers is the most correct?(Required)
Good Credit, GDSR, Appraisal, CMA
Debt to Income Ratio, Appraisal, Good Credit, Current Property Value
GDSR, Appraisal, Good Credit, Mortgage Balance
Good Credit, Debt to Income Ratio, Mortgages and Liens, Appraisal
26. What is the Total Mortgage Amount (including CHMC)?(Required)
$370,642
$394,358
$382,500
none of the above
(Continuing with the example: the homeowner/investor received a fixed rate mortgage at 4.09% with a 5-year term and 25-year amortization.)27. What was the mortgage balance at the end of the 5-year term? (Assume no pre-payments) (No decimal places required)(Required)
$343,840
$323,162
$333,501
$327,485
28. Continuing with the example: the homeowner/investor renewed the mortgage at the 5-year point with a different lender at a new rate of 3.19%, and 25-year amortization. (Assume no pre-payments) (Decimal places required) What is the new monthly mortgage payment?(Required)
$1,581.91
$1,610.97
$1,660.91
$1,561.03
29. What is the mortgage balance after 2 years? (No decimal places required)
$315,432
$309,742
$305,653
$325,211
(Continuing with the example: the homeowner/investor received a fixed rate mortgage at 4.09% with a 5-year term and 25-year amortization.)30. Considering the current mortgage balance, what is the current LTV? (To 2 decimal places)
38.26%
35.96%
37.10%
36.44%
Continuing with the example: Considering the appraised value of $850,000 and the current mortgage balance as calculated in question 2931. What is the total possible HELOC amount available (above the outstanding mortgage balance) assuming a total 80% maximum LTV?
$364,568
$370,258
$354,789
$374,347
Continuing with the example: the homeowner/investor is looking to purchase a 3-unit rental property in Ontario. The homeowner/investor is looking to use a HELOC on their principal residence for the upfront expenses, specifically down payment and renovation costs. HELOC borrowing rate = 2.75%. Conveyancing and inspection costs will be incurred from their own resources.

32. Considering the homeowner/investor will require a 20% downpayment to acquire this property (to come from the HELOC), the Land Transfer tax (to come from the HELOC) and the renovation costs (to come from the HELOC), what is the total amount required to borrow from the homeowner’s HELOC?(Required)
$194,150
$195,800
$196,900
$201,980
33. Considering the borrowing amount required from the HELOC, coupled with the existing mortgage balance on the principal residence; what is the new LTV on the principal residence? (To 2 decimal places)(Required)
62.02%
61.42%
61.30%
61.10%
34. Regarding the 3-Unit rental property and the Income & Expenses noted above (including mortgage), what is the annual positive cash flow?(Required)
$57,040.00
$26,927.20
$25,187.20
$28,807.20
35. Considering the HELOC borrowing rate (noted above) and the amount needed for acquisition (also noted above), what is the annual interest portion required to pay on the HELOC? Note: Use a HELOC calculator for this (here’s one you can use: https://www.mortgageloan.com/home-equity-loans)(Required)
$5,384.52
$5,339.16
$5,414.76
$5,554.44
36. Assuming the homeowner/investor is paying the monthly interest on the HELOC out of the positive cash flow from the 3-unit rental property, what is the total annual cash flow the homeowner/investor is experiencing?(Required)
$19,848.04
$51,700.84
$21,588.04
$23,468,04
Gross Monthly Rent: $3,950

Mortgage payment: $2,455

Vacancy & Credit Loss: 5%

Monthly Utilities: $ 680

Property Management Fee: 9%

Annual Property Taxes: $3,620

Monthly Insurance: $ 130

Maintenance: 5%37. Calculate the NOI on the property example above:(Required)
$17,940
$20,786
$25,054
-$4,406
None of the above
38. What is the DCSR on this property? (To 2 decimal places)(Required)
0.60%
0.85%
1.17%
0.70%
39. Using your DSCR answer from question 38, what is the overall portfolio DCSR should the investor own properties with the following DCSRs: 1.94%, 1.62%, 0.91%, 2.25%. (To 2 decimal places)(Required)
1.68%
1.58%
1.48%
1.51%
40. In a GP/LP Business Structure, the General Partner is liable only to the extent of the investment they have made in the property.(Required)
True
False
41. What is one of the initial key factors when an investor is acquiring a property to utilize the BRRRR strategy?(Required)
Acquiring a property with little renovation required
Acquiring the property under market value
Acquiring a property found off the MLS
Acquiring a property with good bones
42. There are several factors necessary when searching for properties on behalf of an investor looking to implement the BRRRR strategy. Choose the most correct answer.
Is the property currently rented?
Does the property show well?
Is it possible to raise the ARV?
Is the DOM number excessive?
43. What is the Flip Formula?
Maximum offer price – renovation costs – carrying costs – closing costs
ARV – closing costs – renovation costs – carrying costs – desired profit = maximum offer price
Maximum offer price – renovation costs – carrying costs – closing costs – agent commissions
ARV – agent commissions – renovation costs – carrying costs – closing costs = maximum offer price
List price: $849,000

Renovated Comps(avg): $950,000

Closing costs: $ 28,500

Carrying Cost (6 mo.): $ 23,040

Property Taxes (6mo.): $ 2,225

Insurance (6mo.) $ 1,855

Renovation Cost: $ 60,000

Minimum Profit: $ 25,000

Agent Commission: $47,50044. Example: You are representing an investor who does flips. What is the maximum price you can offer in the following situation? (use the example data above)(Required)
$761,880
$708,380
$660,880
$809,380
45. What are the 2 main components from a contractual standpoint in a Rent to Own property?(Required)
Option to Purchase Agreement and a Standard Residential Lease agreement
Standard Residential Lease Agreement and a Joint Venture Agreement
Standard Residential Lease Agreement and a Mortgage Application
Option to Purchase Agreement and a Purchase and Sale Contract
46. From a contractual aspect, what implications can occur if a Tenant/Buyer is late on a rental payment? Choose the most correct answer.
Forfeit their initial deposit
Forfeit their option consideration fee
Forfeit their right of first refusal to purchase the property
Are relegated to the status of a tenant
All of the above
47. What are the advantages to a Tenant/Buyer when participation in the Rent to Own process when compared to renting?(Required)
No maintenance issues
No landlord to deal with
Not chasing the market
No credit check
48. What type of property works best for a Rent to Own? Choose the most right answer.(Required)
Duplex
Townhome
Condo
Any house in good condition
49. Generally speaking, in a ‘working poor’ area, pick the strategy which an investor would have the most success.(Required)
Rent to Own
Fix and Flip
Rental
BRRRR

Annual Gross Rental Income: $ 232,200

Additional Income Sources: $ 18,400

Expenses:

Annual Mortgage: $68,826.48

Property Management: 9%

Property Taxes: $ 12,424

Insurance: $ 5,940

Utilities: $ 77,760

Maintenance: 10%

Admin: $ 5,750

Annual Gross Rental Income: $ 393,600

Additional Income Sources: $ 42,150

Expenses:

Annual Mortgage: $116,705.76

Property Management: 8%

Property Taxes: $ 32,285

Insurance: $ 25,040

Utilities: $102,760

Maintenance: 10%

Admin: $ 9,22550. What is the NOI of Building 1?(Required)
$94,648.00
$96,488.00
$92,998.00
$24,171.52
51. What is the NOI of Building 2?(Required)
$59,206.24
$195,592
$175,912
78,886.24
52. What is the Cap Rate of Building 2? (To 2 decimal places)(Required)
4.35%
3.90%
1.32%
1.75%
53. What is the Cap Rate of Building 1? (To 2 decimal places)(Required)
3.38%
3.38%
3.44%
3.51%
54. The prospective purchaser is looking for a minimum cap rate of 4.15% on Building 1. What would this make the price of Building 1? (No decimals required)(Required)
$2,280,647
$2,325,012
$2,250,500
$2,240,915
55. Same question for Building 2, also using a 4.15% Cap Rate(Required)
$4,238,843
$4,713,060
$1,099,867
$4,187,950
56. What is a tenant responsible for in a triple net lease? (Choose the most correct answer)(Required)
Landscaping, Utilities, Insurance, Bookkeeping, Rent,
Rent, Property Tax, Maintenance, Security, Utilities
Maintenance, Property Tax, Rent, Insurance, Utilities
Security, Landscaping, Property Tax, Utilities, Rent
i) Unit size = 2245 square feet
ii) Cost per square foot = $32.50
iii) Landscaping = $1,692.40
iv) Bookkeeping = $167/mo.
57. Calculate the monthly rent (to 2 decimal places) based on the information above:(Required)
$6,080.21
$1,447.66
$7,772.60
$8,084.21
58. Name places/people to find off market deals (Choose the most correct answer)(Required)
Mortgage brokers, Private lenders, Lawyers
Credit counselors, Collection agencies, Investors
Divorce lawyers, Bankers, Investor agents
All of the above
59. As an InAgent, what is the first aspect in establishing a new relationship with an investor? (Choose the most correct answer)
Understanding where they live
Understanding the investor’s criteria
Understanding who is on their team
Understanding your market
All of the above
60. What is not included in a financing binder?(Required)
Principal residence and rental property details
Existing vehicle leases or loans
Credit bureau and letter of employment
2 years T1 General and Articles of Incorporation
Name This field is for validation purposes and should be left unchanged.

20% DP: $ 197,180

Mtg. Amt: $788,720

Rate: 2.59%

Mtg Pmt: $ 3,568.65/mo.

Taxes: $ 4248

Insurance: $ 1,740

Heat: $120/mo.

Gross Family Income: $165,770

Credit card: $413.85/mo.

Car lease: $675.73/mo.

Car Loan: $645.05/mo.

LOC: $332.95/mo.

Rental Income: $4,125/mo.

## 4 Unit Property Example:

Use the following factors in your calculations.

## Upfront Costs

Market Price: $1,500,000

Purchase Price: $1,400,000

20% Downpayment: $ 280,000

Initial Mortgage Balance: $1,120,000

5 year Fixed – Interest Rate: 2.39%

Amortization: 25 year

Inspection: $ 1,100

Land/Prop. Transfer Tax: $ 24,475

Legal/Conveyancing: $ 1,650

Renovation: $ 25,000

## Expenses:

Insurance: $ 3,342 annual

Property Mgt: $ 644/mo.

Property Taxes: $ 5,466 annual

Utilities: $ 3,414 annual

Maintenance: $ 412.50/mo.

Vacancy: $ 412.50/mo.

## >Monthly Gross Income:

$ 8,250/mo.## USING THE SAME EXAMPLE:

## 4 Unit Property Example:

##

Use the following factors in your calculations.

### Upfront Costs

###

Market Price: $1,500,000

Purchase Price: $1,400,000

20% Downpayment: $ 280,000

Initial Mortgage Balance: $1,120,000

5 year Fixed – Interest Rate: 2.39%

Amortization: 25 year

Inspection: $ 1,100

Land/Prop. Transfer Tax: $ 24,475

Legal/Conveyancing: $ 1,650

Renovation: $ 25,000

### Expenses:

###

Insurance: $ 3,342 annual

Property Mgt: $ 644/mo.

Property Taxes: $ 5,466 annual

Utilities: $ 3,414 annual

Maintenance: $ 412.50/mo.

Vacancy: $ 412.50/mo.

### Monthly Gross Income:

###

$ 8,250/mo.

4 Unit Property Example:

Use the following factors in your calculations.

Upfront Costs

Market Price: $1,500,000

Purchase Price: $1,400,000

20% Downpayment: $ 280,000

Initial Mortgage Balance: $1,120,000

5 year Fixed – Interest Rate: 2.39%

Amortization: 25 year

Inspection: $ 1,100

Land/Prop. Transfer Tax: $ 24,475

Legal/Conveyancing: $ 1,650

Renovation: $ 25,000

Expenses:

Insurance: $ 3,342 annual

Property Mgt: $ 644/mo.

Property Taxes: $ 5,466 annual

Utilities: $ 3,414 annual

Maintenance: $ 412.50/mo.

Vacancy: $ 412.50/mo.

Monthly Gross Income: $ 8,250/mo.

4 Unit Property Example:

Use the following factors in your calculations.

Upfront Costs

Market Price: $1,500,000

Purchase Price: $1,400,000

20% Downpayment: $ 280,000

Initial Mortgage Balance: $1,120,000

5 year Fixed – Interest Rate: 2.39%

Amortization: 25 year

Inspection: $ 1,100

Land/Prop. Transfer Tax: $ 24,475

Legal/Conveyancing: $ 1,650

Renovation: $ 25,000

Expenses:

Insurance: $ 3,342 annual

Property Mgt: $ 644/mo.

Property Taxes: $ 5,466 annual

Utilities: $ 3,414 annual

Maintenance: $ 412.50/mo.

Vacancy: $ 412.50/mo.

Monthly Gross Income: $ 8,250/mo.

## Refinance Example

A homeowner/investor purchased their Principal Residence in Ontario 7 years ago at $425,000.Downpayment Amount: 10%

CMHC Fee: $11,858

## 3 Unit Rental Property Purchase

Example

Use the following factors in your calculations.

Upfront Costs

List Price: $ 799,999

Purchase Price: $ 780,000

Downpayment: 20%

Mortgage rate: 2.04%

Amortization: 25 Years

Inspection: $ 1,100

Land/Prop. Transfer Tax: $ 24,150

Legal/Conveyancing: $ 1,650

Renovation: $ 14,000
Income & Expenses

Monthly Rental Income: $

5,200/mo.

Annual Property Tax: $ 3,620

Insurance: $ 145/mo.

Utilities: $ 0.00 (incurred by tenants)

5% Maintenance Fund: $ ?

5% Vacancy Fund: $ ?

Mortgage payment: $2,455

Vacancy & Credit Loss: 5%

Monthly Utilities: $ 680

Property Management Fee: 9%

Annual Property Taxes: $3,620

Monthly Insurance: $ 130

Maintenance: 5%

Renovated Comps(avg): $950,000

Closing costs: $ 28,500

Carrying Cost (6 mo.): $ 23,040

Property Taxes (6mo.): $ 2,225

Insurance (6mo.) $ 1,855

Renovation Cost: $ 60,000

Minimum Profit: $ 25,000

Agent Commission: $47,500

## Property Example

An investor is looking for a multi-family property up to 30 units. You find a 9 unit (Building 1 for our example) and a 16-unit property (Building 2 for our example). Each building is in good shape and could be a deal for your investor. You need to understand which the best deal is based on the numbers. You have been provided the numbers on each property from the listing and prospectus. They are as follows: Note: use 3% Vacancy & 2% Credit loss in your calculations.

## Building 1 – List Price $2,750,000

Annual Gross Rental Income: $ 232,200

Additional Income Sources: $ 18,400

Expenses:

Annual Mortgage: $68,826.48

Property Management: 9%

Property Taxes: $ 12,424

Insurance: $ 5,940

Utilities: $ 77,760

Maintenance: 10%

Admin: $ 5,750

## Building 2 – List Price $4,500,000

Annual Gross Rental Income: $ 393,600

Additional Income Sources: $ 42,150

Expenses:

Annual Mortgage: $116,705.76

Property Management: 8%

Property Taxes: $ 32,285

Insurance: $ 25,040

Utilities: $102,760

Maintenance: 10%

Admin: $ 9,225