Portfolio Management & Advisory Services
Executive Summary
Recommendations for John DeRight & Judy DeRight

Prepared by, Vijay Sundar
* M.P.S in Real Estate, Class of ‘12
Cornell University, NY, USA

* B.E. in Civil Engineering, Class of '07
Anna University, Chennai, India Talk: +1 - 949-385-0403 Write: vs328@cornell.edu
Principles of Real Estate Development – HA6620 - Angus Cartwright / Assignment 4

John DeRight & Judy DeRight both members of the long standing DeRight family based in Arlington, Virginia are looking to diversify their portfolio of investments and are contemplating investing in real estate to achieve their investment goal. Both are in a different stages of their life and are considering one of the four real …show more content…

The results from tables 9a-9d are summarized in Table 10 and Table 11 in the Detailed Analysis. We observe that, of the four properties, 900 Stony Walk has the biggest chunk of the tax component. It is also to be noted that the current tax regulations allow taxable losses from other investments/income (passive income) can be used to offset against those in real estate income. As a special consideration (our assumption) we don't consider the passive income restriction and apply this benefit to any other income (active or passive) that the investor might have. By performing a sensitivity analysis on the available investment opportunities, we are able to compare both qualitatively and quantitatively, the result(read returns) of a investment to different sources of variations in the assumptions(implied), facts(explicitly stated) and variables(market conditions) that make up the investment. Among the four properties, Alison Green, exhibits the characteristics of being on the the safest properties by the way of having a large part of the returns comprised of returns from the Operating cash flow relative to the returns from reversion/capital gains. In case of The Fowler Building, we notice that the reversion value has a significantly large proportion of the returns. Not only this factor makes it risky, but the fact is the result of the sensitivity