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    BCF 400 Real Estate Finance

    Uploaded by

    Mulwa Muthoka

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    © All Rights Reserved
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    BCF 400 Real Estate Finance

    Uploaded by

    Mulwa Muthoka
    2 views3 pages

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    2 views3 pages

    BCF 400 Real Estate Finance

    Uploaded by

    Mulwa Muthoka

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    You are on page 1of 3

    MURANG’A UNIVERSITY OF TECHNOLOGY

    SCHOOL OF BUSINESS AND ECONOMICS


    DEPARTMENT OF COMMERCE

    UNIVERSITY ORDINARY EXAMINATION

    2018/2019 ACADEMIC YEAR


    FOURTH YEAR, FIRST SEMESTER EXAMINATION FOR BACHELOR OF
    BACHELOR OF COMMERCE (FINANCE OPTION)

    BCF 400: REAL ESTATE FINANCE

    DURATION: 2 HOURS

    DATE:

    TIME:

    Instructions to Candidates:

    1. Answer Section A and Any Other Two questions in Section B.


    2. Mobile phones are not allowed in the examination room.
    3. You are not allowed to write on this examination question paper.

    Page 1 of 3
    SECTION A – ANSWER ALL QUESTIONS IN THIS SECTION (30 Marks)
    QUESTION ONE
    a) Write short notes on the following terms used in Real Estate Finance.
    (i) Loan origination fees. (2 Marks)
    (ii) Improvements to land. (2 Marks
    (iii) Encumbrances. (2 Marks)
    (iv) Bundle of Rights (2 Marks)
    (v) Mortgage (2 Marks)
    b) Joint ventures are formed by at least two parties with the intent of achieving a specific
    investment objective. Discuss the attributes surrounding the formation of joint ventures.
    (6 Marks)
    c) Discuss, giving examples the classification of real estate based on possession and use.
    (4 Marks)
    d) Describe the characteristics of real estate market. (4 Marks)
    e) An ARM for Ksh 60,000 with an initial interest rate of 10% is originated with a term of 30
    years but its payment are to be reset at the end of one year based on an interest rate
    determined by a specified index at that time. Based on these initial loan terms, monthly
    payments would be approximately Kshs 527 per month for the first year, and the balance at
    the end of the year would be Kshs 59,666. If the market index were to rise at the end of one
    year and change the interest rate on the ARM to 12%. Determine payments based on the
    outstanding loan balance for next 29 years. (6 Marks)

    SECTION B – ANSWER ANY TWO QUESTIONS IN THIS SECTION


    QUESTION TWO (20 MARKS)
    a) Discuss what motivates investors to make an equity investment in income properties.
    (10 Marks)
    b) Explain risks affecting mortgage loans. (10 Marks)

    QUESTION THREE (20 MARKS)


    a) Identify and explain three real estate valuation methods. (10 Marks)
    b) Discuss the merits of the limited partnership ownership form or real estate syndication.
    (10 Marks)

    Page 2 of 3
    QUESTION FOUR (20 MARKS)
    a) Describe the various ways in which a buyer can be assured that the title is good and
    marketable. (10 Marks)
    b) Explain any five sources of real estate finance available in Kenya. (10 Marks)

    Page 3 of 3

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