Anderson Street Case Solution & Answer



Leonard was also attractive in the sense that other people were attracted towards this property;as a result the market value of this property had increased from last few years. Although the surrounding locations are ideal for any residency as this property is ideal to cover the distances of main places of the city,how ever this place is also beautiful and has a natural beauty around the property. Mr. Leonardis looking for a property, which is most suitable for him and this one clearly attracts him more to achieve his dream.

Anderson Street Case Solution
Anderson Street Case Solution

However,there are also other factors that would affect the return on investment as mostly investors were satisfied to gain 8% return from cash investment and in some areas the return reached up to 12.5% .

As we discussed about the location in the earlier part and the location of the property guided owners of the property to raise its value 3 to 4 times higher, therefore the return on investment has increased and made Leonard interested to buy the property.

However,the physical state of the property needs some renovation as that is also the reason for the seller to sell this property because he has no more cash to renovate this property.

Nonetheless,the approval from commission to not to build any building in this area is becausehis area contains some historical memories and the new structuring of buildings makes the historical memories and some infrastructure ost. Due to this reason, this matter would enhance the values of the existing building and also makeenhancement in the return on investment.

Although the expenditure related to remodeling of the building has made Mr. Leonard thinkabout doing this job by himself instead of payingthe contractor extra charges, which would lead tocash flows problems for him. However,after remodeling it guaranteedthat the value of the property will also enhance.

The rent charges have also increased especiallyat the back slope where one room apartment can be rentedout for $675 to $800 and two room apartment can be rentedout for $900 to $1100. This increase is due to enhancement in the values of the existing property.



Mr. Leonard tried to find out several ways to get loan of$210000. He visited two different bank loan providers and each bank hadits own financing policies. In addition,the comparisonand evaluation between the two loan providers is attached with the file. However,Mr. Leonard tried to get his desired amount of loan.Moreover,he has theoption to get this loan from second bank as evaluated in other file howeverthe terms and condition related to that loan could not satisfy him.
The valuation part has been done in other file and according to that valuation; Mr. Leonard borrowed the money from the second loan provider. Although the cash outflow from that loan is higher than the first one however,Mr. Leonard also got the amount of loanloan that is higher than the previousone.


According to the analysis, Mr. Leonard had cash flow problems because he had limited resources to invest there but he wanted to acquire that property. He had issues in taking several decisions as he wanted to live in that apartment because all he wanted was to save cost by doing relevant work related to the building.Moreover, he isalready doing a job, however his wife also does not want to live there because it will create more burden for him. Over all, it will be very tough for Mr. Leonard to solve the matters and handle stress financially and socially both. Therefore,it’s all about handling this situation while in pressure and the relevant experience required in this field however,we still believe by taking step as an optimist that this investment will be beneficialfor him especially in long term scenario.


Although it looks like a good investment for him and he also wants to go with this investment for long term period, therefore the investment in real estate property regarding that location will be beneficialfor him if he decides wisely. Although in general, the real estate investment involves a lot of external factors that would enhance or devalue the property’s value, therefore it is up to the investor’s nature whether he is optimist or pessimist. Thus,the investment looks attractive and it will surely be beneficialto the investor………………………..

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