Beacon Hill

The fixed cost is assumed that Larry has discovered the other fixed cost incurred. The total investment is $800,000. The worst case scenario assumes that Larry got a total line of credit from the bank in the amount of $400,000 and invested $400,000 from other source. The Notes payable – short term and the long-term debt is (11.8 + 3.7) = 15.5 % from Table F in the handout. The Loan interest and payment per year is ($400,000 * 0.155)= $62,000. The Income data from Table F indicates that there is a 0.4% of all other expenses net out of the total sales which equals to $109,908 (5,700,666 gallons * $4.82 *0.4%) .

Pikes Peak is a beautiful, rocky mountain with a fantastic view. The day my family and I were going to go up Pikes Peak the day was gorgeous. Heading up the mountain is so relaxing, having conversations with my family while looking out the tinted window. Looking out my window I could see columns and rows of the most perfect looking pine trees rising up the peak. During the climb it was so admirable and calm as I was thinking in my head, what a perfect day. The view was fantastic as I got to see the world breathing in all of the fresh air. Pikes Peak has three lakes which are very inviting with its clear blue water glistening from the sun. The lookout on the very tip of Pikes Peak was very foggy and chilly. The view was pretty cool since I’ve

will put up the money for the building, and Fred will complete the remodeling. While inspecting the building, Fred is

spent enormous amounts of money on this mansion that he would barit ely even use instead

The property, according to Alexander, was aesthetically desirable and had profit potential; additionally the asking price of $350,000 was within his price range. Some renovation on the property was needed and the cost approximates $165,000 according to a contractor. After preparing an income and expense statement, Alexander projected a cash flow before financing of $61,510, without any allowance for the work he would do himself. He also planned to live in the top floor apartment with his wife “rent free”, while making money by managing and renting. With time of the essence, he had to act fast and take the property off the market before a potential investor got ahead of him.

Table 7 in the detailed analysis above shows the summary of the Discounted Cash Flow analysis performed for each of the four potential properties considered for investment. From the chart below, we observe that of the four properties, TFB has the maximum increase in reversion value at the end of the holding period, i.e. 10years. On a primarily income generation potential basis, Alison Green, with a Net Present value of the future rents at $734.29 looks attractive among the four options. Looking at the Investment ranks of the four properties with Simple returns and Discounted returns variables, Alison

(6) Determination of the appropriateness of this particular property for Alexander’s personal needs. Should Alexander make this investment?

In “Monkey Hill,” Stan Rice writes about the speaker of the poem who sits at a zoo with his friend observing the spider monkey exhibit. The two stay the whole day to observe these monkeys. The speaker becomes envious of these monkeys and their ability to be confident with exactly where they are and with who they are. Rice argues that our minds imprison us when we are worried about judgment from others. The monkeys in the exhibit felt free and at ease while the two observers were trapped in worrisome about the outside world in fear of how others would perceive them.

Mr. Alexander is a gentleman that is looking to build his investment portfolio through residential real estate. He is looking at investing in a 4-plex in a historical district located within Boston, Massachusetts. The building is located on Revere Street and has a listing price of $350,000. Mr. Alexander is evaluating the possible commitment to understand what he stands to gain from the annual cash flows while at the same time understanding the risks involved. The subject property is located within a historical district and is not yet capable of housing tenants. Property will require significant improvements prior to inhabitation. Client

After analysis of Mr. Alexander’s proposal, it is obvious why he should take advantage of a real estate investment opportunity. The experience he would gain coupled with the added income would establish a solid foundation for making more investments in the future. To this end, however, I find Alexander’s plan for the Revere Street property falls short. A major deficiency is that his projections are almost entirely predicated on estimates and assumptions that are neither conservative nor reliable. In a similar vein, Alexander’s “DIY” approach is not only exemplar of naiveté, but also suggestive of many implications that were overlooked in his proposal. And, even more discouraging, a best-case scenario analysis reveals that even without

Given certain indicators of slow market growth and the high purchase price being advertised by the seller, this is most likely a bad investment for Laflin and his investors. While employment growth may be on the rise, the lack of speculative construction is troubling as this implies the market is not expecting an increased demand. In any case, when considering the expiration of the current tenants’ above market rents and the unfortunately low current market rents, Laflin would still need a great deal of growth in addition to a lower negotiated price to make this investment profitable.

The real estate division was estimated to have a fair value of $13,890,000. This was determined by totaling the number of lots expected to sell within the next four years and multiplying it by the price per lot of $180,000. After determining total lot sales, a 20% discount rate was applied as suggested by current market conditions. Given the unique nature of the real estate development, it is not believed that there are any comparable developments to find a market multiple.

He already would have a tenant for 100,000 SF of space and the additional 75,000 he would find over the next couple of years. On the other hand if Bailey wants to take on more risk in terms of converting the condo’s he would 150 in his inventory and they could become a problem to sell. It is always easier to rent something than sell a large unit. If Bailey were to convert the building into condos it would cost him $31,800,000 to do the conversion. Then if he charged around $575 (lower than building across the street) for the low floors and $625 for the high floors, this total revenue would be 104,375,000, which after condo conversion fees would be $7,2,575,000 minus other expenses. However, we must not that before he can start selling these condos, it would be 2 years from the date where he bought the building. Therefore, he would lose out on Cash flows year 1 and 2 as seen in the excel sheet from renting the building. In the long run, however, if all of these apartments were the sell, he would make much more. Furthermore, he could also rent whatever he wouldn’t be able to sell. The building is at least worth 15,000,000, though the bids will be much higher. The building was in an attractive location in the heart of downtown a few blocks from the financial district.

Larry Landlord has recently renovated an apartment and has put it on the market to be rented for $800.00 a month. Larry Landlord has been in business for approximately five (5) years and has had both positive and negative experiences with tenants. Larry Landlord is hoping to find a good, long-term tenant for his apartment. Roger Renter saw Larry’s sign for the apartment for rent and thought the location and the apartment would be perfect. Roger met Larry to look at the apartment and Roger fell in love with it. All of the interior fixtures had been replaced and the unit had a nice

Since remodeling the house, Sexton has been operating the property at a profit, with income from operations currently at $15,000. If we based the sales price on current net operating income and an 8.25% capitalization rate, Sexton should be able to sell the property for about $182,000. Exhibit 1 provides a sales price range between 162,000 and $207,000 based on a range of cap rates.