Nathalie Parizat and her husband, Hugo, were contemplating a new real estate investment. For two years they had been frustrated by and lamenting their situation of paying high rents to third parties while the couple had idle cash in the bank. They also were convinced that Brooklyn's rising rents and property prices were showing no signs of abating. The couple had $100,000 in savings, which they intended to combine with mortgage financing to purchase a residential income-producing building. Nathalie focused her search on Brooklyn, narrowing it down to Williamsburg, where she thought there was better potential to make a good return on their investment. She had quit her full-time job and was planning on managing the building and the renovation-should it be needed-herself. Was she ready to take on this challenge or was she in over her head?

Questions

1. Why did the couple want to buy a building?
2. How did they search for the property? What criteria did they use? Should they have focused on Brooklyn?
3. How would you evaluate the property on 78 3rd street? Does it meet their desired criteria? What are the pros and cons of investing in this specific building? What are the risks and challenges involved?
4. Would you make this investment if you were them? Would you live in one of the units?
5. How did Nathalie and Hugo search for financing? Which option seems better for the young couple?