Financial analysis and Valuation
After a few assignments the concepts or rules that have been learned or that I may study
from are what I want to believe could make me a greater finance agent. I wanted to share more of
the things that I picked up in this class but I feel that I can wait. Knowing the financial risk is
easier than making the gamble, but with certain placed limitations some people may be able to
gain a type of security in the industry. In this paper I will discuss a bit of how I value the homes
that I theoretically acquired and what methods I used to get them. This in part will better explain
how I use the rules and ethical techniques in the market.
Fair Market value of my selected home
I chose a home that was priced at $675,000 on (zillow.com). Interestingly enough I can
not find the same home when just using the price I saw it listed as. What I did find was another
home that was priced similarly albeit a bit cheaper. Does this signify the move quick and think
later factor that could effect much of business or people in general? Possibly, but however the
assignment says to average the price of alternate properties or (comps) to find a value. Based on
this formula $420000 + $542000 + $800000 = $1762000 Then take the this figure and
divide it by 3 or $1762000 ÷ 3 = $587, 333 which is not too far off of my asking price of
The next way to valute the home was to ask the seller. Since I can no longer find the
listing I can only say that I would have stuck to my own beliefs. Which means that I can not
afford to go higher than my asking price which in many ways is more than I would be willing to
pay for many things.
One other strategic plan to evaluate the worth of property
How I feel is that the neighborhood is everything, not the entire selling point but one that
I say can be looked at when renters or landlords inflate prices. Does the idea that the neighbors
pay the rent include how much they raise or change the neighboring amenities. Thinking of it
like this says that most people would rather be a set of individuals that they can stomach long
enough to grill or shop, or far enough from them that you would have to yell to say to keep off
I was going to look over the Wall Street journal example for inflation but have decided to
use a internet search for rates that may rise for property and the environment. This type of
inflation effecting some and not all of the neighborhoods. Using (reference) the idea of Market
rate housing and Displacement. This argues rather or not rent is too high. Is it it fir to not change
the neighborhoods settings in lower income homes but still increase the rent or asking price for
the home. Constantly changing the rates for the “suburbs” which may offer “aesthetic” features
with a few other accommodations.
This means that the asking price must match what I feel that the acquisition brings to me
in all of its implicit value. The implicit value being all of which that I may not say I value but
will use in determining its worth.
Three methods of acquiring property Last week we went over some of the more popular ways
that someone may acquire a piece of real estate. Using those three different types of
procurement, I will describe the pros and cons of these methods. With each of these methods we
can be sure that the entire process will be (1.) very pricey so initially I want to say that in each of
these procurement methods the number on “con” will be the cost or expenses.
Next in order to save time I will describe Leasing property as one way the acquisition
could be made. “Pros”; taxes that go along with the property can be handled in different matters.
which may allow for certain benefits, the property could possibly be subleased and still worked
on to enhance its value, and the lease could possibly be exchanged for monetary or property
value. “Cons”; A landlord has say in the movement of certain issues within the home, More
rising cost depending on how the home is financed and what it is that is being rented or leased.
Then we can outright buy the property. This is one of the safer methods in some opinions
possibly,”pros” being that the home will build equity and add security to the owner, the tax
benefits may increase wealth or credit, the home can be sold for pure monetary value. “Cons”;
The home must be maintained to keep its appreciation from decreasing in value, there could be
huge property taxes that must be paid, Mortgages and other finance issues if you do not plan on
selling the house can make living conditions worse.
Finally there is the gift of real estate. This may require a “quitclaim” a type of deed that
says the house is being given as a gift. “Pros” This gift can add to the home owners personal
wealth, the gift can now be considered an heirloom giving it certain legal tender or conditions.
“Cons”The home may be taxed heavily or not even be able to be gifted in some scenarios, the
home could also require upkeep that could be hard to manage,
In this scenario it can be simple to discuss how easy it is to either get a loan or manage
one. The sources of income being one’s own personal finances or the collective efforts of a
group. In this paper I chose to keep the matter simple and take the class for what it was.
Sculpting the idea for the knowledge I had and what I could walk away with. This is what I feel
should be how a real process should be. Not too much of a risk with easy enough terms to not be