Real Estate Finance And Investment Question Paper
Real Estate Finance And Investment
Course:Bachelor Of Commerce (Commerce)
Institution: Kabarak University question papers
Exam Year:2009
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KABARAK UNIVERSITY
EXAMINATIONS
2008/2009 ACADEMIC YEAR
FOR THE DEGREE OF BACHELOR OF COMMERCE
COURSE CODE: FNCE 424
COURSE TITLE: REAL ESTATE FINANCE AND
INVESTMENT
STREAM: Y4S2
DAY: MONDAY
TIME: 9.00 – 11.00 A.M.
DATE: 23/03/2009
INSTRUCTIONS:
- Answer Question ONE and any other TWO questions.
- Write your registration number clearly, be neat and show all the workings
PLEASE TURN OVER
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QUESTION ONE
i) Discuss the progress of Real Estate Industry from the ancient times of feudalism
to the current heavy investment industry. (6mks)
ii) Discuss any 4 job opportunities that generally exist in the Real Estate Industry.
(10mks)
iii) With the current flourishing real estate business, justify the need for property
management. (6mks )
iv) A real estate developer has tried to sell a property but all in vain. Due to this
market condition one has decided to seek technical advice from industry experts.
The situation is as follows: the property is an income generating that is offered in
the market for 100,000 Kenya shillings. Projected net operating income (NOI) is
10,000 KES and the general market rate is 10.4 percent.
Use the above given data to deduce a market value of the property, then advice
the investor. (8mks)
QUESTION TWO
i) Assume that an investor has Ksh. 4,500,000 and wants to invest this amount in a
variable – rate – payment mortgage at 8.5 percent original interest rate, with a 30
year term and monthly payments. In the contract, the interest rate is meant to be
adjusted at the end of each year and rate increases at 0.25 percent per year.
Calculate the monthly payments for the first, second and the third years of the
loan. (10mk s)
ii) Give a critical view of the term “real estate syndication” and describe any 5
reasons for it. (10mks)
QUESTION THREE
i) Give a detailed description of Mortgage Finance Industry Structure in Kenya.
(10mks)
ii) Describe the trend of the Kenyan Mortgage Finance Institutions. (10mks)
QUESTION FOUR
i) Describe any 5 primary Mortgage Market makers in the real estate industry.
(10mks)
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ii) Discuss the following other financing methods found the very dynamic industry
of the real estate: (10mks)
a) Buy down Morgages:
b) Zero interest Mortgage (Z.I.Ms)
QUESTION FIVE
i) Describe a leases and sale-leaseback financing environment. (6mks)
ii) Describe the following terminologies as applied in the real estate finance industry:
(10mks)
a) Redemption
b) Foreclosure
c) A real estate broker
d) Mortgagee and
e) Mortgagor
iii) Discuss any 2 current socio-economic and financial developments in the Real
Estate Industry. (4mks)
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