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Fnce 424:Real Estate Finance And Investment December 2008 Question Paper
Fnce 424:Real Estate Finance And Investment December 2008
Course:Bachelor Of Commerce
Institution: Kabarak University question papers
Exam Year:2008
KABARAK UNIVERSITY
EXAMINATIONS
2008/2009 ACADEMIC YEAR
FOR THE DEGREE OF BACHELOR OF COMMERCE
COURSE CODE: FNCE 424
INSTRUCTIONS:
1. Answer question ONE and any other TWO questions
2. Write your registration number clearly, Be neat, brief and show all your workings
Question 1 (30 marks)
i. Give a critical view on the progress Real Estate from feudalism era to the current heavy
investment industry. (8 marks)
ii. Describe any 5 job openings that are normally found in the Real Estate Industry.
(10 marks)
iii. Compare and contrast the fixed and variable rate mortgages (6 marks)
iv. A real estate developer intends 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 1,500, 000 Kenya shillings.
Projected net operating income (NOI) is 30, 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.
(6 marks)
Question 2 (20 marks)
i. With the current booming business in the real estate sector, justify the need for property
management services. (10marks)
ii. Currently, there are many developments in the Real Estate Industry especially in the financial
issues.
Discuss any 5 recent developments in this industry. (10 marks)
Question 3 (20 marks)
i. Assume that an investor has Ksh.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 1st to 4th years of the loan. (10 marks)
ii. Briefly describe the trend of the current Kenyan Mortgage Finance Institutions.
(10 marks)
Question 4 (20 marks)
i) Especially concentrating on mortgage finance institutions discuss any 4 conventional approaches to
affordable housing in the Kenyan mortgage environment.
(10 marks)
ii. Describe any 5 informal ways of mitigating the housing challenges
(10 marks)
Question 5 (20 marks)
i. Despite the fact that most of the Kenyan population lives in temporary structures, it is still difficult
for the low and middle income earners to access the mortgage facilities in the real estate market.
Describe any 10 factors that could have led to this exclusion.
(10 marks)
ii. Describe Real Estate Syndication and discuss any 4 reasons for it. (10 marks)
All the Best and God bless you as you honestly work on the paper
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