Real Estate Investment Strategy Case Study Scenario: A $22-$year$-$old young adult just graduated from college and is looking to purchase a first home. This person just obtained full$-$time employment, making $$45,000$ a year. The person's credit score is $650$ and student loan debt is $$35,000,$ with a $$350$ monthly payment. In addition, this person has $$5,000$ in credit card debt with a $$125$ monthly payment and a car payment of $$400$ a month.After meeting with a mortgage broker, the mortgage broker approves an FHA loan not to exceed a purchase price of $$175,000,$ with a monthly payment $($including taxes, HOA, and insurance$)$ not to exceed $$950$ a month. The buyer is required to put $3\mathrm{.}5\%$ down on the purchase price.The three residential options currently available to the individual include the following:

Option A consists of a two$-$bedroom, two$-$bathroom condominium built in $1995$ with a purchase price of $$155,000.$ This property is located in an HOA, which covers the outside structure of the unit for repairs and requires an HOA payment of $$165$ a month. The monthly payment for this property $($including taxes, insurance, and the HOA fee$)$ will be $$850$ a month. When making investment recommendations, consider the long$-$term value on the condominium as compared to single$-$family home.

Option B consists of a three$-$bedroom, two$-$bathroom, single$-$family home built in $1975$ with a purchase price of $$150,000.$ This home will require $$10,000$ in updates to bring the market value to $$175,000.$ The home is a non$-$HOA community and the monthly payment $($including taxes and insurance$)$ will be $$750$ a month. When making investment recommendations, consider the long$-$term value of single$-$family homes in an HOA vs$.$ non$-$HOA communities.

Option C consists of a two$-$bedroom, two$-$bathroom, single$-$family home built in $2015$ with a purchase price of $$175,000.$ This property is located in an HOA, which covers the outside structure of the unit for repairs and requires an HOA payment of $$65$ a month. The monthly payment $($including taxes, insurance, and the HOA fee$)$ will be $$950$ a month. When making investment recommendations, consider the long$-$term value of a single$-$family home containing only two bedrooms.

Analyze the client's credit data and available financial information to construct a net worth statement. Begin by prequalifying the client by calculating the debt$-$to$-$income ratio, capital rate, ability to apply a down payment, and subsequent mortgage interest rates. Based on the current financial standing of the client and the options provided, discuss the mortgage options that are available to the client and determine the degree of risk involved in extending credit or lending money to this client.

Review the financial details related to the collaborative efforts of other financial service organizations, such as brokers and lenders, and the available investment options provided in the scenario. Complying with real estate regulations and principles of ethical servant leadership, make a real estate investment recommendation by providing a detailed rationale using your knowledge of customer risk profiles, types of securities$,$ economic fundamentals, competitive risks of property type, tax obligations of the property type, and ethical investment strategies.