1. 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.

An individual is interested in buying a duplex with two bedrooms and two bathrooms. The purchase price of the duplex is $250,000, and there is currently one tenant occupying one of the units paying $850 a month. The mortgage broker informs the individual that their decision to possess and occupy the dwelling will determine what loan type and how much down payment will be required.

The options currently available to the individual include the following:

a.Option A is if the buyer chooses to occupy or live in one of the units and continues renting out the second unit. By doing so, the duplex will be considered a single-family residence and the bank will only require the buyer to put 3.5% down on the purchase price, bringing the loan amount to $241,250 with a monthly payment of $1,600. The remaining tenant will continue to pay $850 a month in the other unit as part of their lease agreement. When making investment recommendations, consider the long-term value of a residential property vs. a commercial property with regard to tenant leases and potential profitability.

b.Option B is if the buyer chooses to only possess the property, and not live on the grounds. The bank will perceive this as a commercial or multifamily property requiring the buyer place 30% down on the purchase price, bringing the total loan amount to $175,000 with a monthly payment of $1,100.00. The buyer can collect rent from two families at $850 each, totaling $1,700 a month. When making investment recommendations, consider the long-term value of a residential property vs. a commercial property with regard to tenant leases and potential profitability