Housing Options

1
Housing Options
Team 11

• Bryce Hagen
• Gamal Burhum
• Vesna Eng
• Danny Luu

2
Buy a Used HomeorBuild a New Home

• A Comparison Based On Financial Conclusions

3
Scenario

• Typical College Graduate
• First Time Home Buyer
• Southern California Residence
• Good Credit
• 300,000.00 Budget
• 5.2 30 Year Loan
• Sell The Home After 10 Years

4
Assumtions

• 3.45 Inflation
• 10.0 Real Estate Return
• 10 year Analysis

5
Used House Location

• 2408 Ogden St.
• San Bernardino, CA

6
Used House Details

• 3 Bedrooms, 2 Bathrooms
• Family Room, Dining Room, Living Room
• 2 Car Garage
• 1396 Square Foot House
• 8700 Square Foot Lot
• Built in 1966
• 249,900.00

7
New HouseLot Location

• 2620 Kern St
• San Bernardino, CA

8
New House Details

• 1400 Square Foot House
• Built in 2004
• 9330 Square Foot Lot
• 3 Bedrooms, 2 Bathrooms
• Dining Room, Living Room, Family Room
• 2 car Garage
• Lot - 26,500.00

9
Used House Initial Costs

• 249,900.00 Purchase Price
• 4879.00 Closing Costs
• 531.41 Advance Payments
• 1540.00 Title Charges
• 385.00 Miscellaneous
• 257,235.41 Total Initial Cost

Sell the Home in 10 Years for 650,000.00
10
New House Costs

• 26,500.00 Lot Price
• 196,000.00 Const. Costs
• 16,800.00 12 Month Rent
• 8,826.00 Fees
• 5,000.00 Architect
• 253,126.00 Total Initial Costs

Sell the Home in 10 years for 720,000.00
11
Used Home Maintenance Costs

• 1,000 / year Maintenance
• 9,500 Year 2,4 Plumbing Cost
• 1,500 Year 3, Water Heater
• 7,500 Year 1, New Roof

12
New Home Maintenance Costs

• 0 for the First 10 Years

13
Present Worth Comparison

• -336,635.89 Total Costs
• 277,591.17 PW of Sale
• - 59,044.72 PWC New Home
• -370,048.62 Total Costs
• 250,603.14 PW of Sale
• -119,445.48 PWC Used Home

14
Sensitivity Analysis

• Increased Construction Costs
• 110 - 200 Sq Ft

15
Sensitivity Analysis

• Change in Used Home Price
• 200k 270k

16
Internet Resources

• www.builderonline.com Home Building Tips and
  Warnings
  
• www.home-building-directory.com Instructions
  for Building and Contracting
  
• www.toolkit.cch.com Present Worth Analysis

17
Buy a Used HomeorBuild a New Home

• Any Questions?