Renovating a Foreclosed Property versus Buying Prime Real-estate Jonathan Lee,Jimmy Luong,Vincent Rodriguez, Bryan VineScenario # 1: Foreclosed PropertyScenario # 1: Interior/Basic RepairsScenario # 1: External/Extreme RepairsScenario 1: Purchasing PriceScenario # 2: Premium PropertyScenario 1 Best: Cash FlowsScenario 1 Worst: Cash FlowsScenario 2: Cash FlowsFuture Value at 3 yearsFuture Value at 5 yearsFuture Value at 30 yearsRenovating a Foreclosed Property versus Buying Prime Real-estate Jonathan Lee,Jimmy Luong,Vincent Rodriguez, Bryan VineTeam #5Scenario # 1: Foreclosed Property4 bedroom2 bathroom1,770 ft27800 ft2 lot sizeLand $40,340$121,290 ImprovementsAssessed Total $161,720Transaction Value $150,000Scenario # 1: Interior/Basic RepairsNew Floor (tile, carpet combined) $8500New Interior Paint $2000New Fixtures $3,000Damaged Walls $1000Window Repairs $1000 Total (Internal Repairs) $15,500Scenario # 1: External/Extreme RepairsRoofing $4,000 to $8,000 New Windows $4,000 Landscaping $5,000 Exterior Paint $2,500Central Heating $4,000Kitchen Remodeling $10,000 Total (Worse Case) $33,500Grand Total (Internal + External) $49,000Scenario 1: Purchasing Price Best Case / Worst CaseAssessed Total $161,720 / $161,720Auction discount -$85,712 / -$30,727(53% / 19% )Purchase Price $76,008 / $130,993Basic Improvements $15,500 / $49,000Total $81,508 / $179,993Scenario # 2: Premium Property4 bedroom2 bathroom1,787 ft2Property Value $359,900Scenario 1 Best: Cash Flows1st Mortgage @ 7.5% = -$8,455/year2nd Mortgage @ 7.5% = -$1,724/yearRent (4 rooms @ $325) = $18,000/yearAppreciation @ 2.5% = $4,043/yearTotal Cash Flow = $7,820/yearSale Profit at 3 years = $12,129Sale Profit at 5 years = $20,215Sale Profit at 30 years = $121,290Scenario 1 Worst: Cash Flows1st Mortgage @ 7.5% = -$14,571/year2nd Mortgage @ 7.5% = -$5,451/yearRent (4 rooms @ $325) = $18,000/yearAppreciation @ 2.5% = $4,043/yearTotal Cash Flow = -$2,023/yearSale Profit at 3 years = $12,129Sale Profit at 5 years = $20,215Sale Profit at 30 years = $121,290Scenario 2: Cash FlowsMortgage @ 5.5% = -$24,522/yearRent (4 rooms @ $325) = $18,000/yearAppreciation @ 2.5% = $8,998/yearTotal Cash Flow = -$6,521.64/yearSale Profit at 3 years = $26,993Sale Profit at 5 years = $44,988Sale Profit at 30 years = $269,925Future Value at 3 yearsScenario 1 Best Profit: $34,591ROR: -----Scenario 1 Worst Profit: $6,061ROR: 79%Scenario 2 Profit: $7,428ROR: 34%Future Value at 5 yearsScenario 1 Best Profit: $59,318ROR: -----Scenario 1 Worst Profit: $10,102ROR: 35%Scenario 2 Profit: $12,379ROR: 16%Future Value at 30 yearsScenario 1 Best Profit: $508,600ROR: -----Scenario 1 Worst Profit: $360,951ROR: 17%Scenario 2 Profit: $74,276ROR:
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