PRESENTED BY:SHANE BALDWINCLYDE GEROME

ISAAC KERSHNER

Case Study

Greg and Cindy Hana

• Greg is sole breadwinner and earns $66,000 annually • Eligible for pension when he is 48

• The couples current net worth is $35,500• $3000 CD• $2,000 in checking • $6,500 of life insurance cash value • Two cars worth $2,000• $22,000 Savings

• Greg saves $350 a month in differed compensation plan offered by his work

• The couple has: • $1,000 dollars of stock• $2,000 in mutual funds

• Monthly expenses average $2,800• They qualify for a 4.68% interest rate on a 30 year loan with a

credit score of 688

Needs Wants

Space for themselves and 3 children

Privacy Safe neighborhood

Excellent Schools for Children

Nice Neighbors Shopping relativity

close

Differentiating Needs from Wants

Housing option #1

Two Bedroom One Bath

(866) 517-2555

26 Parkway East #B1 Caldwell, NJ 07006-6025

Name: Two Bedroom One Bath

Beds: 2

Baths: 1

Price Range: $1530-$1605

Min/Max Ft: 900ft²

Availability: Contact Us

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Features:

• Heat, Hot Water, & Cooking Gas Included

In Rent!

• Renovated Kitchens w/ Dishwasher,

Microwave & Gas

• Hardwood Floors

• Air Conditioners Supplied

• Patios and Balconies in Some Residences

• On-Site Manager

• Great Closet Space w/ Closet Organizers

• Window Treatments

• Off Street Parking

• High Speed Internet Available

Pros Cons

No commitmentNot responsible for

repairsOff street parkingUtilities included

with rentAir conditioning

Rent is expensiveOnly two bedroomsMore than twenty

minutes from workPoor school districtPay a depositNo private yard for

the kids

Pros and Cons (Continued)

Apartment $1530-$1605 per month

Hosing Option #2

37-39 Scheerer Ave, NEWARK, NJ 07112

For Sale: $269,000

Zestimate®: $240,920

Est. Mortgage: $1,053/mo 

See current rates on Zillow

Bedrooms:3 beds

Bathrooms:3 baths

Single Family:1,664 sq ft

Lot:4,791 sqft

Year Built:1952

Last Sold:Nov 2009 for $85,000

Pros Cons

Newly remodeledCentral airYard and finished

basementDetached garageMid budgetIndependenceBuild Equity

Only three bedrooms

More than 20 minutes from work

More than 20 minutes to shopping center

All responsibilities as a home owner

Pros and Cons (Continued)

House$269,000 base mortgage $748 per month 30 years

Housing Option #3

33-37 New York AveAPT 2A, Newark, NJ 07105

For Sale: $249,990

Zestimate®: $234,214

Est. Mortgage:

 $979/mo 

See current rates on Zillow

Bedrooms:3 beds

Bathrooms:2 baths

Condo:1,317 sq ft

Lot:1,316 sqft

Year Built:2004

Last Sold:Mar 2005 for $275,000

Heating Type:Forced air

Pros Cons

Low end of budgetGood location, with

in 20 minutes from work and close to a shopping center

Nice neighborhood Good/ close schools

for the kidsShared condo pool

No yard for the kidsLess bed rooms

than desiredNo air conditioning Increased

possibility of noise neighbors at such a close proximity

HOA fees

Pros and ConsCondo

cost $249,990 base mortgage – $695 per month 30 years

Housing Option #4

156 Mapes Avenue, Newark, NJ 07112

Price: $325,000

No. Units: 3

Building Size: 2,800 SF

Price/Unit: $108,333.33

Property Type: Multifamily

Property Sub-type: Duplex/ Triplex/ Fourplex

Property Use Type:Investment

Pros Cons

Is the desired sizeRevenue generating

from renting out the basement ($700-$800 per month)

With in twenty minutes of work

Yard for the kidsBuild Equity

More responsibilities as land lords

Property taxOlder neighborhoodSharing a house and yard

with strangersNeed more savings to pay

mortgage if renters move out

High end of budget if renters are not found

Pros and Cons (Continued)

Duplexcost $325,000 Base Mortgage- $1345.33 per month 30 years

Renting Duplex

Low commitment Not having to pay

for utilities In desired area Cost between

$1530-$1605 per Month

No backyard for kids

30-year mortgage paying $1345.33 per month (4.68% interest)

Possibility to rent you 2nd part of duplex

Back yard for kids Right size for family

Renting Apt vs. Buying Duplex

How much is necessary for a down payment on the Duplex?

$65,000 is necessary for a down payment

Attainable in 12 months if they save $2,500 a month

$224,322.46 paid in interest over 30 years

Total of $484,318.80 paid over the course of the 30 year loan

It will take 30 years to pay off the home unless they double payments to pay it off sooner.

If they double their payments by, perhaps, using rent from the other portions of the duplex their total investment would be $326965.28 in the course of 10-11 years

The Duplex is the Best Housing Option

If they purchase the duplex they can rent out all available space to use the duplex as their “Cash Cow” to save up to eventually move into their own home.