22 Sep For this deliverable, you will seek out your ideal investment property, evaluate comparable properties, and make a competitive offer for the property. As part
This assignment will be submitted to Turnitin™.and avoid A I Text. detection. Instructions
https://www.grammarly.com/ai-detector?utm_source=google&utm_medium=cpc&utm_campaign=21545053911&utm_content=709620349810&utm_term=ai%20detector&target=&targetid=kwd-1443987186183&adgroup=169269628201&device=c&matchtype=b&placement=&network=g&extension=&clickid=Cj0KCQjw3bm3BhDJARIsAKnHoVWrF2L4cfcNfa1WUoQM3anKRfYULZaHkLe89ppaEBRjI6gXJAvP4fMaAo8xEALw_wcB&gad_source=1&gbraid=0AAAAADkCrf-iQuIh4pcXf7JFTEszeuwxR&gclid=Cj0KCQjw3bm3BhDJARIsAKnHoVWrF2L4cfcNfa1WUoQM3anKRfYULZaHkLe89ppaEBRjI6gXJAvP4fMaAo8xEALw_wcB&gclsrc=aw.ds
Deliverable 2 focuses on identifying the investment property and completing the purchase. For this deliverable, you will seek out your ideal investment property, evaluate comparable properties, and make a competitive offer for the property. As part of the identification of this investment, you will need to outline your plans for the property, identify and price out any necessary building or renovations needed, and determine the anticipated value of the property.
Deliverable 2 will require the following:
- Research properties for sale and choose a property that matches the criteria including price point. Save the listing as a pdf or screen shots so that you can refer back to all of the information for the property. Should the property be sold or taken off the market over the next 4 weeks, you will no longer be able to access the web listing…saving this information will be essential for your project.
- Determine a plan for this property. Will it be a rental, flip, development, etc.?
- Identify three comparable properties to the property you want to invest in. Comparable properties should be the same classification (commercial/residential), have similar number of units, similar location, similar size, etc. Determine the offer price you would make for this property. Ensure that the purchase price will fit with your plans. For example, if you are purchasing a residential building to lease, apply the 1% rule. Will you be able to realistically collect 1% of the investment price (purchase plus renovations) for your rents?
- Will this property require renovations, development, or other changes? Outline what will be required. What is the proposed ARV (after repair value) based on comparable properties after you have made these changes?
- Create a pro forma cash flow statement for your chosen property. This should cover the length of time you plan to own the property, or 3 years (for buy and hold). Include information on purchase price, mortgage payments, expenses, renovations or development, and income for the property. Does your property cash flow? If not, you may need to reconsider property usage or the purchase price for the property. Using your pro forma cash flow statement, adjust other assumptions as necessary and outline all assumptions that you make for the property.
- Calculate the capitalization rate, proposed monthly and annual cash flow, and the net present value (NPV) for the time frame of your cash flow statement (length of ownership or 3 years).
Deliverable 2 is due by 11:59 pm CT on Sunday.
1
Real Estate Finance and Investment
September 8th, 2024
Property Classification: Residential
The property's address is 3015 BLODGETT DR, COLORADO SPRINGS, CO 80919. The details suggest the property is residential. Like a luxury estate, it boasts a gourmet kitchen, a main-floor master suite, big sitting rooms, and private and public outside spaces for entertainment. It stands out with high-end finishes and is a comfortable fit for a single-family home, not a company or multi-family structure.
Brishen Combs of RE/MAX Real Estate Group, whose contact number is +1(719)896-1270, is selling the property.
Investment Usage: Buy and Hold
Due to its size, high-end finishes, and superb Northwest Colorado Springs location, the home is ideal for a "buy and hold" owner (Zillow). This technique involves buying a home to rent or sell later for a profit. A wealthy person looking to rent or buy a luxurious property in a wonderful region might consider this one. Its location and high-end features make it a favorable pick.
Pros and cons of "buy and hold"
Benefits:
Due to its location and facilities, the property should initially attract high-income tenants. This ensures constant rental income.
Appreciation Potential: The property's high-end features and desirable Northwest Colorado Springs location make it likely to appreciate.
Tax Advantages: Property owners may receive tax discounts for property taxes, mortgage interest, and debt repayment.
Long-Term Investment: Real estate protects you from inflation and offers a more predictable return than riskier investments.
Drawbacks:
The property's excessively expensive price ($265/sqft) and $7,977 monthly payment may deter low-income investors.
Luxury features like the property's walkout basement's wine cellar and custom bar may increase maintenance and repair expenditures.
If the home does not rent fast, its high-end features could mean more unoccupied space and lower cash flow.
Market Sensitivity: A weak economy may reduce rental demand and luxury real estate property values.
Investment Criteria
The location is Northwest Colorado Springs.
Rich Briargate and Central Colorado Springs surround the home, which is in a prominent neighborhood. This location attracts wealthy tenants and buyers due to its proximity to excellent schools, recreation facilities, and recreational opportunities.
Price Point:
Cost per square foot: $265
After taxes, its value was $1400000.
The monthly cost is $7,977.
When calculating investment returns, consider how expensive the property is and how wealthy the area is.
The property is a superb "buy and hold" investment due to its high-end features and big square footage. These upgrades will make luxury homes more desirable to renters and buyers who want all the conveniences.
Recommended Lender and Loan Product
When all costs are considered, the Legacy Mutual Mortgage is the best lending option. The cheapest mortgage in terms of total loan costs (Jiang et al., 2020). The monthly payment is lower, and the total cost is lower when you add up the fees and the amount you must repay after five years.
Conclusion
Finally, a "buy and hold" investment plan is the best way to maintain this property. Its luxury features and Northwest Colorado Springs location make it a terrific investment for long-term rental income and capital growth. However, potential investors must consider the large initial investment, market volatility, and maintenance expenditures. This property's premium price, fantastic facilities, and magnificent location make it a wonderful long-term investment.
References
Baum, A. (2021). Tokenization—The future of real estate investment. The Journal of Portfolio Management, 47(10), 41-61.
Jiang, Y., Ho, Y. C., Yan, X., & Tan, Y. (2020). When online lending meets real estate: Examining investment decisions in lending-based real estate crowdfunding. Information Systems Research, 31(3), 715-730.
Zillow. Blodgett Dr Colorado Springs, CO 80919. Available at: https://www.zillow.com/homedetails/3015-Blodgett-Dr-Colorado-Springs-CO-80919/13650196_zpid/
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Sheet1
| RE/MAX Real Estate Group | |||||||||
| United Home Mortgage 5/1 ARM 3.82 | Payment | Principal | Interest | Balance | Payment Number | ||||
| Payment | $8,183.84 | ($8,183.84) | ($1,666.15) | ($3,565.33) | $1,118,333.85 | 1 | |||
| Loan Origination Fee | $14,000.00 | ||||||||
| Down Payment | $280,000.00 | ||||||||
| ALTA Loan Policy | $550.00 | ||||||||
| Hazard Insurance Est | $3,500.00 | ||||||||
| Taxes | $2,400.00 | ||||||||
| Payoff after Year 5 | $546,033.74 | ||||||||
| Total Loan Costs at Closing | $300,450.00 | ||||||||
| IntroLend 30 Yr Fixed 4.5 | Payment | Principal | Interest | Balance | Payment Number | ||||
| Payment | $5,674.88 | ($5,674.88) | ($1,474.88) | ($4,200.00) | $1,118,525.12 | 1 | |||
| Loan Origination Fee | $11,200.00 | ||||||||
| Down Payment | $280,000.00 | ||||||||
| ALTA Loan Policy | $550.00 | ||||||||
| Haazard Insurance Est | $3,500.00 | ||||||||
| Taxes | $2,400.00 | ||||||||
| Payoff after Year 5 | $555,533.67 | ||||||||
| Total Loan Costs at Closing | $297,650.00 | ||||||||
| Legacy Mutual Mortgage 30 Yr Fixed 4.46 | Payment | Payment | Principal | Interest | Balance | Payment Number | |||
| Payment | $5,648.29 | ($5,648.29) | ($1,485.62) | ($4,162.67) | $1,118,514.38 | 1 | |||
| Loan Origination Fee | $5,600.00 | ||||||||
| Down Payment | $280,000.00 | ||||||||
| ALTA Loan Policy | $550.00 | ||||||||
| Hazard Insurance Est | $3,500.00 | ||||||||
| Taxes | $2,400.00 | ||||||||
| Payoff after Year 5 | $555,501.54 | ||||||||
| Total Loan Costs at Closing | $292,050.00 |
