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19 Pinckney

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Submitted By barafranca
Words 1895
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19 Pinckney St.
Edward Alexander has $80,000 of his own equity, which he hopes to leverage through investment in real estate. He found a 4-unit building on 19 Pickney St. in Boston. Our analysis showed he should obtain $450,000 through a 20-year mortgage at 8%, as was offered to him by Sarah Harris, in order to invest in this property.

The Property
The property is located at 19 Pinckney St. in the back slope of the historical neighborhood of Beacon Hill in Boston. It is a 4-unit residential building, which a fire has destroyed in 2003, and thereafter only the structural shell remained. An architect started renovating it but stopped in the middle due to lack of funds. The asking price is set at $350,00. A contractor priced the remaining work at $165,000 and said it would be completed within 6 months; thereafter, the building will have three 2-bedroom apartments and one 1-bedroom apartment on the top floor. Alexander estimates that he would be able to do the reconstruction himself and it would take him only 4 months. This assumption seems unrealistic given Alexander’s full-time job and lack of experience in construction. It is also assumed that if he insisted to do so, lenders will be hesitant to finance his project. Therefore, total approximate cost of the renovated building is $515,000.

Location
This location has been demonstrating rising property values. Newbury Street, Financial District and the Boston Commons are within less than a 15-minutes walk. Potential renters will also appreciate the proximity of the river and esplanade within a 10-minute walk. The neighborhood is quiet and has three private and one public school within half a mile radius, which would be beneficial to parents with children who would most likely occupy the 2-bedroom apartments. A disadvantage of this location is the limited number of parking spaces in the proximity of the

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