Four examples of direct investments in real estate. Introduction: Direct investment in real estate refers to a type of investment in which investor own the legal title of the property.

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Answer 1

Question

Chapter 17, Problem 17.1PQ1

Summary Introduction

To determine:

Four examples of direct investments in real estate.

Introduction: Direct investment in real estate refers to a type of investment in which investor own the legal title of the property.

Expert Solution & Answer

Answer to Problem 17.1PQ1

Solution:

Four examples of direct investments in real estate are:

Vacation home.
Commercial property.
Undeveloped land.
Investing in foreclosures.

Explanation of Solution

Four examples of direct investments in real estate are:

Vacation home: Vacation home is another home purchased by the person to enjoy their holidays. Income tax department deals them as second home if the person don't lent it for more than 14 days in a year. If person don't lent it for more than 14 days in a year then he can claim tax deduction on principle and interest amount. If one lent their home regularly then their deduction depends up on the regular maintenance and size of the house.
Commercial property: Commercial property is another property of the person that produces rental or lease income. It can be duplex, fourplex or any other apartment building. In tax law, deduction are only available on the amount of depreciation, mortgage interest, property tax and other rental expenses up to the amount o rental income. In some exception cases deduction are allowed over and above the amount of rental income.
Undeveloped land: People purchase undeveloped land with the purpose of selling it further after sub division of land but it poses a great risk as all the money of the investor get invested in only one investment and the price of property may fall in the event of economic downturn or building slowdown.
Investing in foreclosures: Foreclosures refers to those properties on which the real borrower has failed to make installment payment and the property is sized by the lender. When lender sells the property and the person who bought the property, the whole process of buying and selling the property is known as investing in foreclosures. Sometimes one may invest in foreclosure before the property seized by the lender, by changing the borrower and paying his installment. In this case, interest rate may be high, so one must see all documents carefully before investing in foreclosing. In the sale of seized property, one may get at 30-40% discount but in some area bidding start only 5% below the price so making profit on that is hard. One must also consider looking to the law of property of every state before making any investment.

Hence, these are the four examples of direct investments in real estate.

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The Fortune Company is considering a new investment. Financial projections for the investment are tabulated below. The corporate tax rate is 24 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Year 0 Year 1 Year 2 Year 3 Year 4 Investment $ 28,000 Sales revenue $ 14,500 $ 15,000 $ 15,500 $ 12,500 Operating costs 3,100 3,200 3,300 2,500 Depreciation 7,000 7,000 7,000 7,000 Net working capital spending 340 390 440 340 ?

Answer 2

Question

Chapter 17, Problem 17.1PQ1

Summary Introduction

To determine:

Four examples of direct investments in real estate.

Introduction: Direct investment in real estate refers to a type of investment in which investor own the legal title of the property.

Expert Solution & Answer

Answer to Problem 17.1PQ1

Solution:

Four examples of direct investments in real estate are:

Vacation home.
Commercial property.
Undeveloped land.
Investing in foreclosures.

Explanation of Solution

Four examples of direct investments in real estate are:

Vacation home: Vacation home is another home purchased by the person to enjoy their holidays. Income tax department deals them as second home if the person don't lent it for more than 14 days in a year. If person don't lent it for more than 14 days in a year then he can claim tax deduction on principle and interest amount. If one lent their home regularly then their deduction depends up on the regular maintenance and size of the house.
Commercial property: Commercial property is another property of the person that produces rental or lease income. It can be duplex, fourplex or any other apartment building. In tax law, deduction are only available on the amount of depreciation, mortgage interest, property tax and other rental expenses up to the amount o rental income. In some exception cases deduction are allowed over and above the amount of rental income.
Undeveloped land: People purchase undeveloped land with the purpose of selling it further after sub division of land but it poses a great risk as all the money of the investor get invested in only one investment and the price of property may fall in the event of economic downturn or building slowdown.
Investing in foreclosures: Foreclosures refers to those properties on which the real borrower has failed to make installment payment and the property is sized by the lender. When lender sells the property and the person who bought the property, the whole process of buying and selling the property is known as investing in foreclosures. Sometimes one may invest in foreclosure before the property seized by the lender, by changing the borrower and paying his installment. In this case, interest rate may be high, so one must see all documents carefully before investing in foreclosing. In the sale of seized property, one may get at 30-40% discount but in some area bidding start only 5% below the price so making profit on that is hard. One must also consider looking to the law of property of every state before making any investment.

Hence, these are the four examples of direct investments in real estate.

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Answer 3

Question

Chapter 17, Problem 17.1PQ1

Summary Introduction

To determine:

Four examples of direct investments in real estate.

Introduction: Direct investment in real estate refers to a type of investment in which investor own the legal title of the property.

Expert Solution & Answer

Answer to Problem 17.1PQ1

Solution:

Four examples of direct investments in real estate are:

Vacation home.
Commercial property.
Undeveloped land.
Investing in foreclosures.

Explanation of Solution

Four examples of direct investments in real estate are:

Vacation home: Vacation home is another home purchased by the person to enjoy their holidays. Income tax department deals them as second home if the person don't lent it for more than 14 days in a year. If person don't lent it for more than 14 days in a year then he can claim tax deduction on principle and interest amount. If one lent their home regularly then their deduction depends up on the regular maintenance and size of the house.
Commercial property: Commercial property is another property of the person that produces rental or lease income. It can be duplex, fourplex or any other apartment building. In tax law, deduction are only available on the amount of depreciation, mortgage interest, property tax and other rental expenses up to the amount o rental income. In some exception cases deduction are allowed over and above the amount of rental income.
Undeveloped land: People purchase undeveloped land with the purpose of selling it further after sub division of land but it poses a great risk as all the money of the investor get invested in only one investment and the price of property may fall in the event of economic downturn or building slowdown.
Investing in foreclosures: Foreclosures refers to those properties on which the real borrower has failed to make installment payment and the property is sized by the lender. When lender sells the property and the person who bought the property, the whole process of buying and selling the property is known as investing in foreclosures. Sometimes one may invest in foreclosure before the property seized by the lender, by changing the borrower and paying his installment. In this case, interest rate may be high, so one must see all documents carefully before investing in foreclosing. In the sale of seized property, one may get at 30-40% discount but in some area bidding start only 5% below the price so making profit on that is hard. One must also consider looking to the law of property of every state before making any investment.

Hence, these are the four examples of direct investments in real estate.

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Answer 4

Question

Chapter 17, Problem 17.1PQ1

Summary Introduction

To determine:

Four examples of direct investments in real estate.

Introduction: Direct investment in real estate refers to a type of investment in which investor own the legal title of the property.

Expert Solution & Answer

Answer to Problem 17.1PQ1

Solution:

Four examples of direct investments in real estate are:

Vacation home.
Commercial property.
Undeveloped land.
Investing in foreclosures.

Explanation of Solution

Four examples of direct investments in real estate are:

Vacation home: Vacation home is another home purchased by the person to enjoy their holidays. Income tax department deals them as second home if the person don't lent it for more than 14 days in a year. If person don't lent it for more than 14 days in a year then he can claim tax deduction on principle and interest amount. If one lent their home regularly then their deduction depends up on the regular maintenance and size of the house.
Commercial property: Commercial property is another property of the person that produces rental or lease income. It can be duplex, fourplex or any other apartment building. In tax law, deduction are only available on the amount of depreciation, mortgage interest, property tax and other rental expenses up to the amount o rental income. In some exception cases deduction are allowed over and above the amount of rental income.
Undeveloped land: People purchase undeveloped land with the purpose of selling it further after sub division of land but it poses a great risk as all the money of the investor get invested in only one investment and the price of property may fall in the event of economic downturn or building slowdown.
Investing in foreclosures: Foreclosures refers to those properties on which the real borrower has failed to make installment payment and the property is sized by the lender. When lender sells the property and the person who bought the property, the whole process of buying and selling the property is known as investing in foreclosures. Sometimes one may invest in foreclosure before the property seized by the lender, by changing the borrower and paying his installment. In this case, interest rate may be high, so one must see all documents carefully before investing in foreclosing. In the sale of seized property, one may get at 30-40% discount but in some area bidding start only 5% below the price so making profit on that is hard. One must also consider looking to the law of property of every state before making any investment.

Hence, these are the four examples of direct investments in real estate.

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Answer 5

Chapter 17, Problem 17.1PQ1

Summary Introduction

To determine:

Four examples of direct investments in real estate.

Introduction: Direct investment in real estate refers to a type of investment in which investor own the legal title of the property.

Expert Solution & Answer

Answer to Problem 17.1PQ1

Solution:

Four examples of direct investments in real estate are:

Vacation home.
Commercial property.
Undeveloped land.
Investing in foreclosures.

Explanation of Solution

Four examples of direct investments in real estate are:

Vacation home: Vacation home is another home purchased by the person to enjoy their holidays. Income tax department deals them as second home if the person don't lent it for more than 14 days in a year. If person don't lent it for more than 14 days in a year then he can claim tax deduction on principle and interest amount. If one lent their home regularly then their deduction depends up on the regular maintenance and size of the house.
Commercial property: Commercial property is another property of the person that produces rental or lease income. It can be duplex, fourplex or any other apartment building. In tax law, deduction are only available on the amount of depreciation, mortgage interest, property tax and other rental expenses up to the amount o rental income. In some exception cases deduction are allowed over and above the amount of rental income.
Undeveloped land: People purchase undeveloped land with the purpose of selling it further after sub division of land but it poses a great risk as all the money of the investor get invested in only one investment and the price of property may fall in the event of economic downturn or building slowdown.
Investing in foreclosures: Foreclosures refers to those properties on which the real borrower has failed to make installment payment and the property is sized by the lender. When lender sells the property and the person who bought the property, the whole process of buying and selling the property is known as investing in foreclosures. Sometimes one may invest in foreclosure before the property seized by the lender, by changing the borrower and paying his installment. In this case, interest rate may be high, so one must see all documents carefully before investing in foreclosing. In the sale of seized property, one may get at 30-40% discount but in some area bidding start only 5% below the price so making profit on that is hard. One must also consider looking to the law of property of every state before making any investment.

Hence, these are the four examples of direct investments in real estate.

Answer 6

Chapter 17, Problem 17.1PQ1

Summary Introduction

To determine:

Four examples of direct investments in real estate.

Introduction: Direct investment in real estate refers to a type of investment in which investor own the legal title of the property.

Expert Solution & Answer

Answer to Problem 17.1PQ1

Solution:

Four examples of direct investments in real estate are:

Vacation home.
Commercial property.
Undeveloped land.
Investing in foreclosures.

Explanation of Solution

Four examples of direct investments in real estate are:

Vacation home: Vacation home is another home purchased by the person to enjoy their holidays. Income tax department deals them as second home if the person don't lent it for more than 14 days in a year. If person don't lent it for more than 14 days in a year then he can claim tax deduction on principle and interest amount. If one lent their home regularly then their deduction depends up on the regular maintenance and size of the house.
Commercial property: Commercial property is another property of the person that produces rental or lease income. It can be duplex, fourplex or any other apartment building. In tax law, deduction are only available on the amount of depreciation, mortgage interest, property tax and other rental expenses up to the amount o rental income. In some exception cases deduction are allowed over and above the amount of rental income.
Undeveloped land: People purchase undeveloped land with the purpose of selling it further after sub division of land but it poses a great risk as all the money of the investor get invested in only one investment and the price of property may fall in the event of economic downturn or building slowdown.
Investing in foreclosures: Foreclosures refers to those properties on which the real borrower has failed to make installment payment and the property is sized by the lender. When lender sells the property and the person who bought the property, the whole process of buying and selling the property is known as investing in foreclosures. Sometimes one may invest in foreclosure before the property seized by the lender, by changing the borrower and paying his installment. In this case, interest rate may be high, so one must see all documents carefully before investing in foreclosing. In the sale of seized property, one may get at 30-40% discount but in some area bidding start only 5% below the price so making profit on that is hard. One must also consider looking to the law of property of every state before making any investment.

Hence, these are the four examples of direct investments in real estate.

Answer 7

Chapter 17, Problem 17.1PQ1

Summary Introduction

To determine:

Four examples of direct investments in real estate.

Introduction: Direct investment in real estate refers to a type of investment in which investor own the legal title of the property.

Answer 8

Expert Solution & Answer

Answer to Problem 17.1PQ1

Solution:

Four examples of direct investments in real estate are:

Vacation home.
Commercial property.
Undeveloped land.
Investing in foreclosures.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Four examples of direct investments in real estate are:

Vacation home: Vacation home is another home purchased by the person to enjoy their holidays. Income tax department deals them as second home if the person don't lent it for more than 14 days in a year. If person don't lent it for more than 14 days in a year then he can claim tax deduction on principle and interest amount. If one lent their home regularly then their deduction depends up on the regular maintenance and size of the house.
Commercial property: Commercial property is another property of the person that produces rental or lease income. It can be duplex, fourplex or any other apartment building. In tax law, deduction are only available on the amount of depreciation, mortgage interest, property tax and other rental expenses up to the amount o rental income. In some exception cases deduction are allowed over and above the amount of rental income.
Undeveloped land: People purchase undeveloped land with the purpose of selling it further after sub division of land but it poses a great risk as all the money of the investor get invested in only one investment and the price of property may fall in the event of economic downturn or building slowdown.
Investing in foreclosures: Foreclosures refers to those properties on which the real borrower has failed to make installment payment and the property is sized by the lender. When lender sells the property and the person who bought the property, the whole process of buying and selling the property is known as investing in foreclosures. Sometimes one may invest in foreclosure before the property seized by the lender, by changing the borrower and paying his installment. In this case, interest rate may be high, so one must see all documents carefully before investing in foreclosing. In the sale of seized property, one may get at 30-40% discount but in some area bidding start only 5% below the price so making profit on that is hard. One must also consider looking to the law of property of every state before making any investment.

Hence, these are the four examples of direct investments in real estate.

Answer 12

Ch. 17 - Prob. 17.1PQ1 Ch. 17 - Prob. 17.1PQ2 Ch. 17 - Prob. 17.1PQ3 Ch. 17 - Prob. 17.2PQ1 Ch. 17 - Prob. 17.2PQ2 Ch. 17 - Prob. 17.3PQ1 Ch. 17 - Prob. 17.3PQ2 Ch. 17 - Prob. 17.4PQ1 Ch. 17 - Prob. 17.4PQ2 Ch. 17 - Prob. 17.4PQ3

Four examples of direct investments in real estate. Introduction: Direct investment in real estate refers to a type of investment in which investor own the legal title of the property.

Concept explainers

To determine:

Four examples of direct investments in real estate.

Introduction: Direct investment in real estate refers to a type of investment in which investor own the legal title of the property.

Answer to Problem 17.1PQ1

Explanation of Solution

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Chapter 17 Solutions

Four examples of direct investments in real estate. Introduction: Direct investment in real estate refers to a type of investment in which investor own the legal title of the property.

Concept explainers

To determine: Four examples of direct investments in real estate. Introduction: Direct investment in real estate refers to a type of investment in which investor own the legal title of the property.

Answer to Problem 17.1PQ1

Explanation of Solution

Want to see more full solutions like this?

Chapter 17 Solutions

To determine:

Four examples of direct investments in real estate.

Introduction: Direct investment in real estate refers to a type of investment in which investor own the legal title of the property.