Revere Street- Part I (Multifamily) Roger Staiger III, FRICS (202) 640-8912 rstaiger@gwmail.gwu.edu Purpose Gain Understanding of owner/developer issues within Real Estate Finance Understand tools and methods for evaluating projects Understand general structure of a project pro forma using multifamily case study Gain basic ability to construct a project pro forma Develop initial tools to quantify a project 2 of 82 Vehicle for Understanding Harvard Business Case Relate to Personal Projects Individual investor/developer seeks to learn Real Estate Finance through actual investment 3 of 82 Revere Street Case Summary Edward Alexander wants to invest in Real Estate Alexander has $80,000 to invest …show more content…
He has $20,000 to invest and the cost of the complex is $175,000. He anticipates that with the current market he will be able to finance 95% of the building. He anticipates the following costs for the purchase: Legal Fees ($2,000), Title Insurance ($1,000), and Mortgage Origination ($3,000). He views this as a low risk project and therefore expects the capitalization rate for the project to be 8.0% for the foreseeable future. 16 of 82 Does John have sufficient funds? Construct Sources and Uses Statement Determine if available / identified financing sufficient to cover initial pricing Determine answer to Question #1 17 of 82 Sources and Uses Statement Sources Debt Equity Total Sources Uses Purchase Price Legal Fees Title
The Portrait of Paul Revere is Copley’s only finished portrait of a craftsmen simply enjoying his cup of tea. The way that Copley depicted Paul Revere shows him as a man with little too no emotional appeal. Everything from the dark imaged background, too the blank expression on Pauls face too the lack of design on the tea cup symbolizes a simplistic state of absolute nothing.
There are many myths found in American history which the average person will believe to be true. One of the common historical facts that deals with the stretching of what really went down is the ride of Paul Revere. Most have heard of how Paul managed to ride on horseback through the colonies in the middle of the night yelling, “The British are coming!” He managed to warn the two towns of the oncoming threat with this brave and gallant act. However, the truth of this historical act is very different from the fantasy world which has been around it.
Paul Revere’s contributions before and during the American Revolution were so important that without them the history of the United States could be very different today. As a member of the Sons of Liberty and founder of the “Mechanics”, Revere was successful employing propaganda, code and cipher, and an early warning system to aid colonists in the defeat of the British. However, it is Paul Revere’s midnight ride, warning of the British advance on Lexington and Concord, that he is most remembered for. And Revere’s contributions as the “first intelligence operative” supported the success of the colonists before and during the American Revolution. But what if Paul Revere never took that midnight ride? How would the lack of intelligence resources affected the result of the first battle of the American Revolution? The paper will examine how the outcome of the American Revolution would have changed without Paul Revere’s actions and contributions of intelligence and intelligence assets.
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
Capital cost – The cost of capital is expected to be 8%. This is very significant. If it happens that the capital cost was to be 9%, then the net present value will end up being -$2,271,880. This will be a net present loss of more than $2 million dollars. A meagre difference in cost of capital will determine whether the project will make losses or profits.
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
Feasibility studies are carried out on certain sites to test the usefulness of the initial project brief and to consider how issues on the site can be approached. Site information is specific information on a project in the form of surveys or reports. The procurement task requires preparing project roles tables and contractual trees and continuing the building of the project team. A project roles table sets out the roles needed on a project, as well as outlining the stages of which those roles are required and the people in charge of carrying out the roles. A contractual tree is a diagram which shows the contractual relationship between the parties involved in a project. The programme task is a review of the project programme and the planning task is again where pre-application discussions occur. The suggested key support task involves preparing handover strategies and risk assessments. Handover strategies is the strategy for handing over a building including the requirements for beginning handovers, comissioning and training of
JOHN DE VERE 13TH EARL OF OXFORD, was second son of John, the 12th Earl, a prominent Lancastrian, who, together with his eldest son Aubrey de Vere, was executed in February 1462.
Just like any investor, Leonard is taking into considerations many different aspects: demographics, amenities, rent averages and county regulation. Considered that Leonard is looking for a long-term source of income, he is looking at properties with an expected low depreciation, a maximized capital appreciation and an increasing market value in the foreseeable future. Given his $25,000 and an expected return on the investment of 8%, Leonard realized he would have to look for properties in the back slope of Beacon Hill, where real estate had a great potential market growth. In order to meet all his expectations and at the same
Consider a company that offers coaching calls and private coaching forums. Teachers, fellow students, and real estate investors can guide you into the right path. A coaching forum is important so you can see what kind of problems other investors have. You can also interact and ask questions yourself when it comes to deal structuring, choosing the best deal,
Last, but not least, talk with other investors and inquire where they obtained training. Contact local realtors and ask if they offer investment seminars or can recommend local workshops. Review real estate Classifieds of local newspapers or online bulletin boards such as Craigslist, to locate real estate training events hosted in your
• Step 6: You will now want to consider the impact of each form of financing on the firm. How does the form of financing impact the company’s debt ratios, EPS, ROE, etc.?
If a project is financed only from debt financing the cost of capital will be 8% and if it is only financed from equity the cost will be 10%. But if financing is done 50% from each, then the cost of capital will be 9%.
The chances of a person knowing who Paul Revere is in the years before 1860 was very unlikely. One of the biggest reasons why he is so famous today was published as a poem in that year. The poem, written by Henry Longfellow, describes Revere’s dramatic horseback ride to the town of Lexington, Virginia, as he warns the minutemen around the area of the coming of the British. If it wasn’t for this notable poem, the American’s story and name would have never been brought to light by the American people over 200 years later.
Question 1: Manufacturer Limited is seeking a five-year term loan from its bank. The bank manager