Posted: April 24th, 2025
Deliverable 3 Business Finance Real Estate 350
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 3 will build upon work completed for Deliverable 2 for the pro forma cash flow statement. This deliverable will focus on finalizing those cash flow figures, identifying risks and how to mitigate those risks, potential renovations and eventual disposal of the property. Deliverable 3 will require the following elements:
- Conduct a market analysis for your investment property. Include the availability of other similar properties in your market (supply), the vacancy/sale rates for this market (demand), rents for competing properties or competing sale prices, and any other characteristics of your market.
- Does the area support your desired use for the property? For example, if your market is 99.9% residential rental properties, is this a good market to sell a commercial property or a residential flip house?
- Referring to your pro forma cash flow statement developed in Deliverable 2, include/update your tax considerations. Include property taxes and federal/state/county income taxes. How do taxes impact your bottom line in terms of pretax cash flow, after tax cash flow, and your effective tax rate?
- Determine the Internal Rate of Return (IRR) pretax and after tax.
- Identify the risks associated with your investment based on the information outlined in the module. How do you plan to mitigate those risks?
- Outline an exit strategy for your investment. Include considerations for renovation, refinancing, and disposition of your investment.
Deliverable 3 is due by 11:59 pm CT on Sunday.
Sheet
1
| RE/MAX Real Estate Group | ||||||||||||||||||||||||||||||||||||||||||
| United Home Mortgage 5/1 ARM 3.82 | Payment | Principal | Interest | Balance | Payment Number | |||||||||||||||||||||||||||||||||||||
| $8,183.84 | ($8,183.84) | ($1,666.15) | ($3,565.33) | $1,118,333.85 | ||||||||||||||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||||||||||||||||||
| $5,674.88 | ($5,674.88) | ($1,474.88) | ($4,200.00) | $1,118,525.12 | ||||||||||||||||||||||||||||||||||||||
| $11,200.00 | ||||||||||||||||||||||||||||||||||||||||||
| Haazard Insurance Est | ||||||||||||||||||||||||||||||||||||||||||
| $555,533.67 | ||||||||||||||||||||||||||||||||||||||||||
| $297,650.00 | ||||||||||||||||||||||||||||||||||||||||||
| Legacy Mutual Mortgage 30 Yr Fixed 4.46 | ||||||||||||||||||||||||||||||||||||||||||
| $5,648.29 | ($5,648.29) | ($1,485.62) | ($4,162.67) | $1,118,514.38 | ||||||||||||||||||||||||||||||||||||||
| Loan Origination Fee | $5,600.00 | |||||||||||||||||||||||||||||||||||||||||
| $555,501.54 | ||||||||||||||||||||||||||||||||||||||||||
| $292,050.00 |
Sheet
1
| RE/MAX Real Estate Group | ||||||||||||||||||||||||||||||||||||||||||
| United Home Mortgage 5/1 ARM 3.82 | Payment | Principal | Interest | Balance | Payment Number | |||||||||||||||||||||||||||||||||||||
| $8,183.84 | ($8,183.84) | ($1,666.15) | ($3,565.33) | $1,118,333.85 | ||||||||||||||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||||||||||||||||||
| $5,674.88 | ($5,674.88) | ($1,474.88) | ($4,200.00) | $1,118,525.12 | ||||||||||||||||||||||||||||||||||||||
| $11,200.00 | ||||||||||||||||||||||||||||||||||||||||||
| Haazard Insurance Est | ||||||||||||||||||||||||||||||||||||||||||
| $555,533.67 | ||||||||||||||||||||||||||||||||||||||||||
| $297,650.00 | ||||||||||||||||||||||||||||||||||||||||||
| Legacy Mutual Mortgage 30 Yr Fixed 4.46 | ||||||||||||||||||||||||||||||||||||||||||
| $5,648.29 | ($5,648.29) | ($1,485.62) | ($4,162.67) | $1,118,514.38 | ||||||||||||||||||||||||||||||||||||||
| Loan Origination Fee | $5,600.00 | |||||||||||||||||||||||||||||||||||||||||
| $555,501.54 | ||||||||||||||||||||||||||||||||||||||||||
| $292,050.00 |
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/
Sheet
1
| RE/MAX Real Estate Group | ||||||||||||||||||||||||||||||||||||||||||
| United Home Mortgage 5/1 ARM 3.82 | Payment | Principal | Interest | Balance | Payment Number | |||||||||||||||||||||||||||||||||||||
| $8,183.84 | ($8,183.84) | ($1,666.15) | ($3,565.33) | $1,118,333.85 | ||||||||||||||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||||||||||||||||||
| $5,674.88 | ($5,674.88) | ($1,474.88) | ($4,200.00) | $1,118,525.12 | ||||||||||||||||||||||||||||||||||||||
| $11,200.00 | ||||||||||||||||||||||||||||||||||||||||||
| Haazard Insurance Est | ||||||||||||||||||||||||||||||||||||||||||
| $555,533.67 | ||||||||||||||||||||||||||||||||||||||||||
| $297,650.00 | ||||||||||||||||||||||||||||||||||||||||||
| Legacy Mutual Mortgage 30 Yr Fixed 4.46 | ||||||||||||||||||||||||||||||||||||||||||
| $5,648.29 | ($5,648.29) | ($1,485.62) | ($4,162.67) | $1,118,514.38 | ||||||||||||||||||||||||||||||||||||||
| Loan Origination Fee | $5,600.00 | |||||||||||||||||||||||||||||||||||||||||
| $555,501.54 | ||||||||||||||||||||||||||||||||||||||||||
| $292,050.00 |
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