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This assignment will be submitted to Turnitin™.and avoid A I Text. detection. Instructions
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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.
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NB: All your data is kept safe from the public.