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Scenario One
Using the XLS file recreate the analysis based on Sally’s assumptions.

  1. How did Sally go about searching for the property (positives and negatives) and what was her investment criteria?
  2. As a friend of Sally, she asks for your input. How would you approach evaluating this investment?
  3. How would you evaluate Sally’s approach to underwriting and sourcing the mortgage?
  4. Based on Sally’s underwriting, experience and lifestyle, does the investment and her role make sense for her?
    4 | P a g e – W o o d l a n d s A p a r t m e n t s
    Scenario Two
    Sally was impressed with your thoughts and asks that you join her in this investment as a 50/50 partner. Prepare your own
    XLS analysis with a summary investment memo that outlines the returns, strengths, weaknesses and risks associated with the
    project. An outline of that memo is as follows:
    Executive Summary – Two Pages Max
  5. Provide a summary (chart format) of the financial returns, strengths and weaknesses with the investment.
  6. Summarize the “downside” scenario of what could result in the investment losing money.
  7. Summarize a recommended new offering price for the property “as is” including the study period, deposit
    and when the deposit becomes non-refundable.
  8. Risks – How might the current Philadelphia’s zoning of this asset impact its renovation and its valuation?
  9. What capital reserve might be appropriate for this investment? How do you distinguish between a)
    maintenance, b) repairs and c) capex? Also, is there a need for working capital?
  10. How does the concept of “loss to lease” apply in context to this investment? Does it impact value?
  11. Describe the submarket in the content of rent vs. buying a home…is there a clear preference?
    Financials – Two Pages Max
  12. Insert the new Feasibility XLS model
  13. Explain two key variables that if not met could result in a loss of return / money. Next test the variables
    against your cost. Can you live with the worse-case?
    Asset, Property and Project Management Plans – One Page Max
  14. For the scope of renovation work noted herein, how much will be self-performed by your group vs. bid out.
    Explain why.
  15. Who will manage the asset on site? The group or 3rd party? Explain why
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