Real estate investment

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FinalProjectBUS139.pdf

BUS 139- Project

Real estate investing involves the purchase, ownership, management,

rental and/or sale of real estate for profit. Improvement of realty property as part

of a real estate investment strategy, is generally considered to be a sub-specialty

of real estate investing called as real estate development. Real estate is an asset

form with limited liquidity relative to other investments, it is also capital intensive

and is highly cash flow dependent. If these factors are not well understood and

managed by the investor, real estate becomes a risky investment.

You are given $200,000 by a Venture Capitalist. You must ‘invest’ in one of

the following opportunities.

Please, discuss your ‘Investment Goals’ in terms of Risk you are willing to

take, duration of investment, expenses involved, profits expected and exit

strategy.

Valuation: Which approach will you use for valuation? Why?

Financing: How will you arrange for Finances? Discuss Down payment, Type of

loan, loan expenses, Lender requirements, Loan submissions package

requirements and other determinants

Project Feasibility and Profitability: Discuss ‘Breakeven point’, ‘Feasibility of the

project’, and expected Rate of return on your investment

If acquiring land, then ‘Development costs/ Construction Costs’

Management: Management of acquisition process, finances and operations

Your role: Investor/ Manager/ Partner

Exit Strategy: How are you going to ‘sell’ your investment?

Option 1

Executive Inn & Suites

4301, 27th street, Orange, TX 77632

22,800 SF Hospitality Building Offered at $1,390,000 at a 17.01% Cap Rate

Price $1,390,000 Average Daily Rate 70

Property Type Hospitality Average Occupancy 70

Property Sub-type Hotel/ Motel Number of rooms 52

Building Class C Number of Stories 2

Sale Type Investment Year Built 1980

Cap Rate 17.01% Parking Ratio 2.85/ 1,000 Sq. ft

Lot Size 1.43 acres

Building Size 22,800 Square Foot

DESCRIPTION

NEXT TO I-10 FREEWAY

SALE NOTES

52 rooms, property newly renovated, manager quarters with 4 bed rooms plus living room & Large Kitchen, convenient laundry room next to living quarter. There are 2 buildings on 1.68 ACS of land. Formerly it was Holiday inn,

Good opportunity for Motel business, owner wants to retire. Buyer must have loan pre-approval. Gross Income - $462,165.00 Gross Expense- $212,097,00 Motel located next to Highway 10 with room for 18-wheeler parking to accommodate truckers.

• Holidays inn, Hampton inn, Days inn, Texas inn, Orange inn, Motel 6 behind,

• Right next door is a Waffle House/ Seafood Restaurant & Mexican's barbecue restaurant.

• There are many repeat customer, turn-key business. Possible owner financing Please! DO NOT DISTURB THE GUEST! By Appointment only.

Option 2

1935 W Linden St - La Fuente Apartments

12 Unit Apartment Building Offered at $2,148,000 at a 4.62% Cap Rate in

Riverside, CA

ABOUT 1935 W LINDEN ST, RIVERSIDE, CA 92507

Price $2,148,000 Sale Conditions 1031 exchange

Number of Units 12 Gross Rent Multiplier 13.99%

Property Type Multifamily Average Occupancy 100

Property Sub-type Apartments Number of stories 2

Apartment Style Low Rise Year Built 1959

Building Class B Parking ratio 1.38/ 1000 sq. ft

Sale Type Investment Zoning Description R-3

Cap Rate 4.62% Building Size

Lot Size 0.32 acre

DESCRIPTION

JUST LISTED 12U in the heart of Riverside Close to UCR and all the shopping & amenities. Gated, secure with covered and open parking for all units. Individually metered for gas/electric. Well maintained and historically 100% occupied with upside in rents. Low maintenance with secure picnic area. Close to all shopping, parks, and all the action. Motivated owners will look at all offers seriously.

HIGHLIGHTS

Historically 100% Occupancy, Upside in Rents, Well Maintained Gated Community, Storage Units with Covered and Uncovered Parking for All units

AMENITIES

UNIT AMENITIES

• Air Conditioning, Breakfast Nook, Eat-in Kitchen, Family Room, Range

SITE AMENITIES

• Controlled Access, Gated, Laundry Facilities, Storage Space, Picnic Area

ATTACHMENTS

• 12 UNITS IN RIVERSIDE ON 1935, LINDEN STREET, RIVERSIDE 92507 AT $179 K / DOOR

Unit Mix Information Description Number of Units

1 + 1 10

2 + 1 2

Option 3

10127 Heacock St. Moreno Valley, CA 92557

17.68 Acres of Residential Land Offered at $1,400,000 in Moreno Valley, CA

ABOUT 10127 HEACOCK ST, MORENO VALLEY, CA 92557

PRICE $1,400,000 PRICE PER ACRE $90,498

PROPERTY TYPE LAND NUMBER OF LOTS 1

PROPERTY SUB TYPE RESIDENTIAL ZONING DESCRIPTION R- 2

SALE TYPE INVESTMENT ELECTRICITY AVAILABLE

LOT SIZE 17.68 ACRES WATER AVAILABLE

VIEW CITY LIGHTS, CANYONS NEIGHBORHOOD RESIDENTIAL

The land is surrounded by Single Family Homes. The land is near church, shopping centers, schools and Sunnymead Ranch neighborhood. Zoned for R-2. City is willing to change to R-3, with CUP for 'clustering'. 60 Single Family Homes possible. There is an approved tract map by the city. The seller will consider Joint venture or will carry financing with large down. Buyer to verify all information with the city. Gas, Electric, Water, Telephone & Sewer Available Up To Street. Panoramic Views, Rolling Hills.