Create a real estate investment plan/portfolio based on the following information. Use Cap Rate, NOI,

and ROI to determine which is the best investment strategy and why.

1. Your terms:

a. 100,000 in funds

b. Credit line for 200,000 (loans terms are minimum 20% down payment, LTV is 70%)

c. 30-year mortgage fixed Interest rate for credit is 3.50%

d. 15-year mortgage fixed interest rate for credit is 2.50%

e. Balloon rate 2% for the first 6 months; rises to 9.99%

f. All square footage for properties are the same for each property category

2. Market area #1

a. Basics

i. Area is located 2.5 hours of your home area

ii. Population- Growing at a rate of 6% per year.

iii. Sales of SFM are taking place within 4 months of listing

iv. Sales of Multifamily/apartment homes are taking place within 5 months of

listing

v. Sales of commercial property are taking place within 8 months of listing

vi. Economy - second stage of economic cycle

vii. Residential vacancy rate - 90%

viii. Commercial vacancy rate - 80%

b. Residential

i. Single Family Homes

1. 3/2, same living square meters

2. Price: 200,000,

3. ARV: 300,000,

4. Investment: 50,000,

5. Comparables: 315,000;

6. Rent: 1500.00 per month before renovations, 2500.00 AFR per month;

7. Operating Expenses to include or consider: maintenance of about 5% of

rent, 10% of rent for management, presume tenants pay utilities

8. Close to schools and supermarkets

ii. Multifamily Homes (6 units) -

1. Price: 800,000,

2. ARV: 1,200,000,

3. Investment: 175,000,

4. Comparables: 1,300,000;

5. Rent: 1,250.00 per unit before renovations per month, 2,000.00 AFR per

unit per month;

6. Close to main highways and airport;

7. Operating Expenses to include or consider: maintenance of about 8% of

rent, 10% of rent for management, presume tenants pay utilities

iii. Apartment buildings (14 units)-

1. Price: 950,000,

2. ARV: 1,400,000,

3. Investment: 250,000,

4. Comparables: 1,500,000;

5. Rent: 1,300.00 per unit before renovations per month, 2300.00 AFR per

unit per month;

6. in urban center,

7. Operating Expenses to include or consider: maintenance of about 8% of

rent, 10% of rent for management, presume tenants pay utilities

c. Commercial

i. Offices (20 units) Class B -

1. Price: 1,950,000,

2. ARV: 2.600,000,

3. Investment: 350,000,

4. Comparables: 2,800,000;

5. Rent: 7,500.00 per unit before renovations per month, 10,000.00 AFR

per unit per month

6. Operating Expenses to include or consider: 20% of rent for

management, 6% of rent for repairs, and presume tenants pay utilities

and CAM

ii. Retail -

1. Price: 1,500,000,

2. ARV: 2.100,000,

3. Investment: 450,000,

4. Comparables: 2,200,000;

5. Rent: 10,500.00 per unit before renovations per month, 14,000.00 AFR

per unit per month

6. Operating Expenses to include or consider: 20% of rent for

management, 10% of rent for repairs, and presume tenants pay utilities

and CAM

3. Market area #2

a. Basics

i. Area is located 7 hours of your home area

ii. Population- Growing at a rate of 8% per year.

iii. Sales of SFM are taking place within 5 months of listing

iv. Sales of Multifamily/apartment homes are taking place within 3 months of

listing

v. Sales of commercial property are taking place within 8 months of listing

vi. Economy - between second and third stage

vii. Residential vacancy rate - 80%

viii. Commercial vacancy rate - 75%

b. Residential

i. Single Family Homes

1. 3/2, same living square meters

2. Price: 250,000,

3. ARV: 400,000,

4. Investment: 55,000,

5. Comparables: 385,000;

6. Rent: 1900.00 before renovations, 2800.00 AFR;

7. Close to schools, supermarkets, movie theaters, and parks,

8. Operating Expenses to include or consider: maintenance of about 5% of

rent, 10% of rent for management, presume tenants pay utilities

ii. Multifamily Homes (3-7 units) -

1. Price: 700,000,

2. ARV: 1,150,000,

3. Investment: 150,000,

4. Comparables: 1,225,000;

5. Rent: 2,000.00 before renovations, 2,400.00 AFR;

6. Close to main highways and airport,

7. Operating Expenses to include or consider: maintenance of about 8% of

rent, 10% of rent for management, presume tenants pay utilities

iii. Apartment buildings (8 units or more)-

1. Price: 1,000,000,

2. ARV: 1,500,000,

3. Investment: 300,000,

4. Comparables: 1,550,000;

5. Rent: 2100.00 before renovations, 2650.00 AFR;

6. Urban center,

7. Operating Expenses to include or consider: maintenance of about 8% of

rent, 10% of rent for management, presume tenants pay utilities

c. Commercial

i. Offices (20 units)

1. Class B

2. Price: 1,775,000,

3. ARV: 2.500,000,

4. Investment: 300,000,

5. Comparables: 2,650,000;

6. Rent: 7,000.00 per unit before renovations per month, 9,500.00 AFR per

unit per month

7. Operating Expenses to include or consider: 20% of rent for

management, 6% of rent for repairs, and presume tenants pay utilities

and CAM

ii. Retail

1. Price: 1,350,000,

2. ARV: 1,800,000,

3. Investment: 275,000,

4. Comparables: 1,900,000;

5. Rent: 8,500.00 per unit before renovations per month, 12,500.00 AFR

per unit per month

6. Operating Expenses to include or consider: 20% of rent for

management, 10% of rent for repairs, and presume tenants pay utilities

and CAM