Questions and Answers
What is the definition of Debt Capital?
Borrowed money appearing as a capital asset on the balance sheet
What is the purpose of Equity Capital?
To fund the expansion of the business
What are examples of Money Market instruments?
Short-term certificates of deposit (CDs)
Who can buy Treasury Bills in the money market?
Signup and view all the answers
What type of financing involves trading longer-term financing instruments such as mortgages, bonds, and stocks, influencing long-term financing rates in real estate?
Signup and view all the answers
What do Real Estate Investment Trusts (REITs) provide for real estate companies?
Signup and view all the answers
What represents the amount of money returned to shareholders if all assets were liquidated?
Signup and view all the answers
What is the crucial factor in debt financing?
Signup and view all the answers
What do some real estate developers issue to raise capital, with investors receiving principal amount plus interest upon maturity?
Signup and view all the answers
What is used by real estate companies to raise short-term capital, with investors receiving interest income upon maturity?
Signup and view all the answers
What type of financing involves borrowing money and paying it back with interest, commonly in the form of a loan?
Signup and view all the answers
What do Real Estate companies seek from banks for immediate financial needs?
Signup and view all the answers
What involves raising capital through selling shares to the public, making investors partial owners?
Signup and view all the answers
What type of financing can be acquired through borrowing from private or government sources?
Signup and view all the answers
What do some real estate companies use to raise capital by issuing short-term debt securities?
Signup and view all the answers
What type of financing involves creating diversified portfolios of properties to raise capital?
Signup and view all the answers
What stage do venture capitalists typically exit at to reap profits?
Signup and view all the answers
In which stage of development do Initial Public Offerings (IPOs) occur?
Signup and view all the answers
What is the primary purpose of crowdfunding in real estate financing?
Signup and view all the answers
What does syndication involve in real estate financing?
Signup and view all the answers
What is a significant advantage of pre-selling as a marketing strategy for developers?
Signup and view all the answers
What type of real estate projects do life insurance companies prefer?
Signup and view all the answers
What is the security for real estate mortgage loans provided by life insurance companies?
Signup and view all the answers
What are real estate mortgage loan amounts limited by?
Signup and view all the answers
When is approval by the Commissioner required for loans secured by mortgages on improved real estate?
Signup and view all the answers
Under what regulation are insurance companies engaged in real estate lending?
Signup and view all the answers
What is the primary purpose of insurance contracts in real estate financing?
Signup and view all the answers
Which type of equity capital focuses on high-growth potential businesses?
Signup and view all the answers
What is the impact of equity financing on the company's financial burden?
Signup and view all the answers
What is the primary advantage of equity financing?
Signup and view all the answers
What type of financing involves individual investors, angel investors, and venture capitalists?
Signup and view all the answers
What represents the role of angel investors in equity financing?
Signup and view all the answers
What do venture capitalists primarily evaluate when considering businesses for investment?
Signup and view all the answers
What is the primary limitation of individual investors in equity financing?
Signup and view all the answers
What type of financing does not require repayment of the capital acquired?
Signup and view all the answers
What do pre-need plans primarily cover?
Signup and view all the answers
What is the primary purpose of the trust fund in pre-need plans?
Signup and view all the answers
What is the primary requirement for pre-need companies in investing the trust fund?
Signup and view all the answers
What type of equity capital involves partial ownership by investors?
Signup and view all the answers
What types of plans are covered under RA 9828?
Signup and view all the answers
What are the limitations for direct loans from the trust fund of a pre-need company?
Signup and view all the answers
What is the maximum recorded value of real estate investment allowed for a pre-need company?
Signup and view all the answers
What are the different forms in which equity capital can come?
Signup and view all the answers
What is the advantage of equity financing over debt financing?
Signup and view all the answers
What distinguishes public equity from private equity?
Signup and view all the answers
What is the role of individual investors in equity financing?
Signup and view all the answers
What distinguishes angel investors from individual investors?
Signup and view all the answers
What is the main advantage of equity financing over debt financing?
Signup and view all the answers
What distinguishes venture capitalists from angel investors?
Signup and view all the answers
What is the role of venture capitalists in equity financing?
Signup and view all the answers
Which type of real estate project do life insurance companies prefer?
Signup and view all the answers
What is the maximum recorded value of real estate investment allowed for a pre-need company?
Signup and view all the answers
Under what regulation are insurance companies engaged in real estate lending?
Signup and view all the answers
What represents the role of angel investors in equity financing?
Signup and view all the answers
What is the primary purpose of the trust fund in pre-need plans?
Signup and view all the answers
What is the primary advantage of equity financing over debt financing?
Signup and view all the answers
What is the primary limitation of individual investors in equity financing?
Signup and view all the answers
What is the primary purpose of insurance contracts in real estate financing?
Signup and view all the answers
What do Real Estate Investment Trusts (REITs) provide for real estate companies?
Signup and view all the answers
What is the primary requirement for pre-need companies in investing the trust fund?
Signup and view all the answers
What is the impact of equity financing on the company's financial burden?
Signup and view all the answers
What type of financing involves creating diversified portfolios of properties to raise capital?
Signup and view all the answers
Study Notes
Real Estate Financing and Investment Options
- Venture capitalists demand a significant share of ownership in a business for their financial investment, resources, and connections, often insisting on involvement in managing a company's activities.
- Venture capitalists typically get involved early and exit at the IPO stage to reap profits.
- Initial Public Offerings (IPOs) involve selling company stock shares to the public to raise funds, occurring in a later stage of development.
- Crowdfunding allows individual investors to invest small amounts via online platforms to help a company reach financial goals.
- Syndication involves pooling funds of developers and other investors to create a separate company for a specific project, with Joint Ventures (JVs) being a common approach.
- Pre-selling is a successful marketing strategy for developers, allowing them to generate revenue before project completion, but buyers face the risk of project failure.
- Insurance companies engage in real estate lending as an investment, with life insurance companies preferring larger real estate projects and insisting on equity positions in projects they finance.
- Life insurance companies may lend to policyholders using the value of their policy as security, with specific regulations on real estate mortgage loans.
- Real estate mortgage loans have limitations on loan amounts based on the appraised or market value of the property and maturity period.
- Approval by the Commissioner is required for loans secured by mortgages on improved real estate if the improvements do not belong to the landowner.
- Insurance companies are regulated under RA 10607, which defines their activities, including making insurance contracts and reinsurance business.
- Insurance contracts involve one party indemnifying another against loss, damage, or liability arising from an unknown or contingent event.
Pre-Need Plans and Equity Financing
- Definition of pre-need plans, including types of plans and coverage
- List of pre-need companies with certificates of authority for licensing year 2023
- Investment of the trust fund by pre-need companies, including limitations and requirements
- Types of equity capital, including private equity, public equity, and real estate equity
- Explanation of equity financing and its advantages, such as no obligation to repay the capital acquired
- Impact of equity financing on the company's financial burden and available capital for investment
- Requirement to share profits and consult with equity investors for decisions affecting the company
- Types of equity financing, including individual investors, angel investors, and venture capitalists
- Characteristics and limitations of individual investors, such as needing more investors to reach financing goals
- Role and contributions of angel investors, including their industry experience, connections, and advice
- Characteristics of venture capitalists, such as making substantial investments and focusing on high-growth potential businesses
- Key factors for venture capitalists when evaluating businesses, including competitive advantages and prospects for success
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
