The Beginner Investor IQ Test Welcome to the Investor IQ Test for real estate investors. In the following test, choose the answer that best answers each question. Not all the other answers are "wrong", they just may not be the best answer. There are 20 questions in the test, and 3 questions per page. You'll get a results page emailed to you at the end of the quiz. To get started, please tell us your name and give us an email where we can send you the results of the test. When you are ready to begin, click on the Next button below. Your Name Email Address What does it mean to invest in something? Choose the best answer: A. To put money into a venture that you hope will return more than you put in. B. To put time, money, or effort into something that you are betting will return handsomely. C. To put time, money, or effort into something for which you calculated the risk. D. To invest time or money into a risky venture to get better-than-average returns. E. To put money into anything classified as a venture None Who is a real estate investor? A. Someone who puts money, time, or effort into real property, as defined by U.S. law. B. A person who buys a property for the sole purpose of renting it out to someone. C. Someone who buys a property, fixes it up, and then sells the property for a profit. D. All the above answers. E. Only answers (B) and (C). None What does the term “passive income” refer to? A. This is earned income that passes through a corporate tax return to a personal return. B. This is income that comes from sources that you don’t have to disclose. C. This is any type of income that passes from the income column to the expense column. D. This is income that you have only temporarily because it is already committed elsewhere. E. This is income that isn’t created by an active enterprise. None What does the somewhat humorous acronym “J.O.B.” stand for in the investing world? A. Juxtaposition of Operations on the Battlefield. B. Jerrymandering Official Ballots. C. Just Over Broke. D. Jumping Out of Building. E. Jeffersonian Options Board. None The real estate investing term “fix and flip” refers to what practice? A. Getting ready to sell a property that you just fixed up. B. Buying, fixing, and selling a property, usually within 3 months. C. Fixing a property and then “flipping” it to a pre-arranged buyer. D. Rehabbing a property then “flipping” it onto the rental market. E. Buying a property then “flipping” it to another real estate investor. None The term “buy-and-hold” refers to what real estate investing practice? A. Buying land to hold until you’re ready to build a residential property on it. B. Buying the deed to a property at the sheriff’s auction and holding it for 30 days. C. Buying a property then renting it out to tenants. D. Buying properties that are held in a real estate investment trust (REIT). E. Buying a property, holding it to season the title, then selling it to another investor. None The term “wholesaling” refers to what real estate modality? A. Buying a property then immediately selling it for a higher price. B. A business that sells properties through a brokerage-like arrangement. C. Finding distressed properties to sell to investors after seasoning the title. D. The fastest way to make real estate investing profits. E. Answers (A) and (D) only. None What does it mean to “season” a title? A. It’s an old REALTOR ritual to sprinkle salt on a new homeowner’s title for good luck. B. Planning to purchase a property at the right time of the year. C. To hold ownership of a property for a period of time to satisfy a lender’s requirements. D. To find clauses in the title that could cause a challenge of ownership. E. To put a title into escrow for 45 days before selling the property. None When investing in real estate, which modality or practice produces the best return on investment? A. Rehabbing, also known as “fix and flip”. B. Wholesaling. C. Buy-and-Hold. D. It depends. E. Answers A, B, and C. None Given all the possibilities, what’s the best way to finance your first property acquisition and repair? A. Using a commercial lender that specializes with investor-owned properties. B. Having a mentor or coach (that can vouch for you) “hook you up” with money people. C. Purchase a directory of hard-money lenders and start dialing for dollars. D. Contact an association of private money lenders to see who will do the deal. E. Take out a special 203(k) loan that allows you to rehab properties for low interest. None What kind of State licensure must you hold to do real estate investing? A. You need to have SEC Regulation D, Rule 501 “accredited investor” status. B. You need to have the designation of “licensee” defined by your state’s real estate board. C. None, but you need to have proof of business liability insurance for your business. D. None, but you must work for a state real estate licensee for a minimum of 6 moths. E. None, but it helps to be a state real estate licensee to get access to the MLS. None In real estate investing, what does it mean to have an “exit strategy”? A. In the course of doing the deal, you execute your exit strategy when something goes wrong. B. It’s a term that is used to mean what you do once the money lender has been paid. C. An exit strategy is executed after you have achieved all your real estate investing goals. D. This describes what you’re going to do after you have purchased and repaired a property. E. This is a formal plan that is required by all commercial lenders. None When we refer to the “ARV” of a residential property, what are we talking about? A. “After-Repair Value” refers to what a property will be worth after it has been repaired. B. The “Aggregated Reinvestment Value” is the amount you can invest in other properties. C. Real estate agents look at “Approximate Retail Value” to help set property pricing. D. An “Air Release Valve” is present on many residential hot-water heating systems. E. The “Association Rules Viewer” is used to research homeowner association documents. None How do you get distressed properties to purchase and repair? A. Ask REALTORs for properties that they can’t list because of condition. B. Send letters directly to homeowners in a specific area that you want to work. C. Purchase it from a wholesaler for a marked-up cost. D. Buy it as a foreclosure at the Sheriff’s auction. E. All the above None How do I structure a business around real estate investing? A. Simply start doing the work personally and write checks from your own banking account. B. Form a Limited Liability Company and make sure all your operations are separate from you. C. Form a Corporation and then elect for Sub-Chapter “S” status. D. Any of the above will work for a real estate investor. E. B and C only. None How do I go about choosing a name for my real estate investing business? A. Choose a name that is very specific to what you want to do so people get it. B. Avoid using the word “investing” or related words in the name. C. Choose a name that is somewhat ambiguous so that you’re not tied to a specific practice. D. Find an Internet domain name that you like, secure it, then name your business. E. B, C, and D. None What is the best way to get the practice and the knowledge necessary to do real estate investing? A. Find world-class real estate investor training that features practitioner-instructors. B. Most local community colleges have a curriculum that gives you this footing. C. Get a mentor and a coach to work with directly on your first few properties D. Take the training from your local area REALTOR education division. E. A and C. None Can you do real estate investing as a part-time business until you grow it fully? A. No, it takes a lot of education, training, and work to get it right, so you should be focused. B. Yes, it’s just a matter of figuring out your one niche so that you’re not wasting time. C. Yes and, like most things, the more you work it, the faster that you’ll grow it. D. No, most companies frown on you doing other professions while you are employed. E. B and C. None What should you look for in a real estate investor education system? A. A big-name guru that started on HGTV. B. Educators that are themselves real estate investors in the area that they are teaching. C. Highly-trained professional educators that study topic matter and can deliver it well. D. A company that’s been around educating people for many years. E. B and D. None Besides the technical knowledge to do the work, what is the one most essential ingredient? A. A “people” personality that lets you schmooze and relate well to people. B. Networking with like-minded people in as many ways as you possibly can. C. Having a source of private funds to close deals fast and turn as many as possible D. All the above. E. None of the above. None What does it mean to invest in something? Choose the best answer: A. To put money into a venture that you hope will return more than you put in. B. To put time, money, or effort into something that you are betting will return handsomely. C. To put time, money, or effort into something for which you calculated the risk. D. To invest time or money into a risky venture to get better-than-average returns. E. To put money into anything classified as a venture None Thank you for taking the Investor IQ Test. Now click SUBMIT to score your answers. Time's up
