Many investors use mortgage debt to help finance capital investment for income-producing real estate.In doing so,the owner will receive income as long as the property produces enough income to cover all operating and capital expenditures,the mortgage payment,and all state and federal income taxes.Therefore,the owner's claim is commonly
Referred to as a:

Question

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The type of claim described in the scenario is a residual claim. This is because the owner's claim to the income is paid after all operating and capital expenses, mortgage payments, and taxes have been covered. They only receive the remaining income, which is referred to as the residual. This is unlike a primary claim, which would be paid first and would have priority over other claims. A joint claim would involve multiple parties sharing a claim to the income, and a superior claim would have priority over other claims due to its legal status.

Many Investors Use Mortgage Debt to Help Finance Capital Investment