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Style:
APA
Subject:
Business & Marketing
Type:
Case Study
Language:
English (U.S.)
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Total cost:
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Topic:

Risks on Real Estate Investments

Case Study Instructions:

Please look at the attached document for the detailed instructions and the case study as well
Please use real estate terms in answering the questions.
Please contact me if you have any questions

Summary of Assignment:

Round One Discussion Posts Due (Four Posts Total)

Real estate investments are complex. As a real estate investor, you must observe national and local economic trends, study the unique characteristics of the neighborhood in which you are investing, carefully examine numerous prospective properties, assemble a business plan for financing, purchasing, and operating each project, and take action based on your best guess on an unknown future.

The Pinckney Street Case Study offers an opportunity for you to grapple with many of the issues above – and gain insight from your peers who have different insights and perspectives.

Toward that end, we have created the Pinckney Street Case Study Discussion Series: four separate Graded Discussions through which you’ll contribute to a class-wide discussion on the case study.

Prompt posed in each of the FOUR Graded Discussions. (Four Posts Total)

To facilitate a lively discussion, each of your Round One responses to the Discussion Prompt must end with a follow-up question. The question you pose should be on something you would be interested to read other people’s perspectives on and can be related or unrelated to the Discussion Prompt.

During Round One, each student must make their First Post in each of the four Graded Discussion in which they respond directly to each Graded Discussion’s Discussion Prompt. That First Post must contain a question to which other students may reply.

Posting Guidelines:
As a general guideline, posts should be somewhere between six and twelve sentences (long enough to be

substantive, short enough not to be a novel).

You should support your argument by drawing explicitly from the case study – citing specific examples and data points from within the case.

You should also draw directly on the course material. You don’t need to cite something from every lecture, but you should ground your responses in the material we’ve covered (using key terms where appropriate).

In awarding scores for your discussion posts we will look at both Quantity and Quality.

Quality refers not to how many sentences you wrote (in fact, we place limits on this) but rather “Did you contribute, or attempt to contribute, throughout the discussion?” Our measurement of quality can be summed up in the following questions:

1. Did you demonstrate direct knowledge of the case?
2. Did you draw in different aspects of the course during the discussion?
3. Did your comment move the conversation forward?
4. Above all: after you’ve posted or spoken, are your classmates better off because you did so?

The nature of the topic and the case study method means there is no single “right” answer to most Discussion Prompts(which is not to say that every answer is correct).

A significant part of your score will therefore be based on a subjective, qualitative evaluation of your work by our team of live, trained graders (who grade onsite at the instructor’s office).

Being graded on material where there are few clear-cut, objective “correct” answers and points are awarded (or deducted) based on our subjective assessment of the overall quality of your work can take a little getting used to for some but it is an integral part of case learning.

QUESTIONS

  1. Discussion Prompt #1:

"What was the single most important element of Edward’s property research? Explain your reasoning."

  1. Discussion Prompt #2:

"Is it a good idea to be living in a building that one is managing? Why or why not?"

  1. Discussion Prompt #3:

"What is the greatest risk / threat to Edward’s success with this investment? Be very specific and explain why you feel Edward should pay extra attention to this risk / threat?"

  1. Discussion Prompt #4:

"Should Edward make this investment or should he keep looking? Why or why not?

This question can be addressed in any of the following ways:

#1. Highly Quantitatively: You have the information you need to do a full-blown Stage 1 and Stage 2 analysis and evaluate the project.

#2. Somewhat Quantitatively: You can easily do a Stage 1 Analysis and, if you feel that it demonstrates the project is not a good idea, you can explain why and stop there.

#3. Highly Qualitatively:  You may argue on the basis of non-financial issues both in favor of the investment (ex: he's young, it's better to get started sooner than later, this project is as good as its likely to get, etc) or against the investment (he's inexperienced, has precarious overall personal financial situation, etc.).”

Case Study Sample Content Preview:

Grad Assignment Case Study Response 4 Questions
Students Name
Institutional Affiliation
Course Code and Name
Instructors Name
Date
Grad Assignment Case Study Response 4 Questions
Discussion Prompt #1:
Edward was highly concerned about the expenses and income of the building. The costs of the building play an essential role in Edwards's decision since they would determine the amount of mortgage he needs to carry out the whole project. If the building incurs many expenses, it would not be favorable to Edward because he would require a high amount of mortgage to finance the expenses. The high mortgage would, in turn, need him to pay a large monthly amount that his salary could not cater for. The expense consideration made Edward decide to manage the building to cut on the expenses incurred by hiring a contractor. He would live in the building with his wife as they did most of the activities such as cleaning that could, in turn, incur them more expenses. The income was also a significant consideration because it determined whether he could afford the building or not (Poorvu et al., 2013). Many investors prefer to buy a building that could accumulate high profits to help offset the expenses. If the monthly expenses exceed the income, it would not be advisable for Edward to buy the property. Banks would also not be willing to offer him a loan that would facilitate the development of such property. Therefore, the expenses and income of a property are essential aspects to consider when purchasing a property.
The failure to consider such a factor would result in an individual purchasing a building that will cost them money instead of making them profits. Edward was right to consider the income and expenses of the various buildings before deciding on the exact building to buy. The information helped him compare mortgage terms from two loan providers. Without such consideration, he could have gotten a loan that would put him through financial hardships in the long run. He would also have bought a building that could not generate enough income to cater to the expenses. 
Is it advisable to buy a building that has many expenses but is expected to generate profits in the future?
Discussion Prompt #2 
It is a good idea to be living in a building that a person is managing. The main reason why people choose to sell buildings is the high expenses incurred. If a building has high expenses, the income generated would be used to offset them. Therefore, the investment would not be worth it because it might not be making enough profits. Hence, the owner decides to sell it to invest in other sectors or buy better buildings. In the case study, the seller knew how tight the lending environment was, and the building was probably not making enough profits. Hence, the seller chose to sell it and is willing to offer finance to the next buyer. If one chooses to manage a building that they live in would help in reducing the expenses incurred in hiring another person to manage it. Edward claims that the contractor's fee is a lot of money that would increase the building's expenses, yet he can play the role of a contractor (Poorvu et al., 2013). He also claims that hiring a janitor would incur extra expenses, yet he can clean...
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