ANGUS CARTWRIGHT IV Harvard Case Solution & Analysis

Aangus Cartwright iv Case Study Solution

Introduction

Judy and John Deright wanted to make a short term investment in order to increase the future value of investment. Moreover, they wanted to diversify investment in order to minimize their risk. The primary focus of their investment is to identify the critical factors that would increase their future cash flows which are generated by these properties. The aim is to expand the activities of investment by considering four properties for the future.

The main reason of investing in real estate is to increase the diversification of investment so that risks related to investments could also be reduced. Moreover, other benefits such as freedom from inflation and tax advantages would also be included.

The subject of earning profit expectations should be higher than the industry levels. Therefore, for making rational investment, it has been consulting Angus Cartwright so that necessary investment criteria could be set for acquiring these properties. The main reasonfor making the desired criteria is that after a year, capital gain could be earned over investment whenselling property.

Consequently, it would be important for the consultant that is AngusCartwright to make advice in such a manner that could secure investment. Moreover, developing the criteria to make proper evaluation of all four properties when purchasing is important. The properties that arebeing dealt with Deright include Alison Green, 900 Stony Walk, Ivy Terrace and FlowerBuilding. However, the results from assets valuation would be clearly showing the future value of the property from holding period to the selling time periodwhich is after a year. The modifications which are included for Cartwright are the operating expenses that could be adjusted by decreasing the occupancy rate and reducing the margin of leasing criteria in order to achieve future cash flows.

Problem statement

The main issue that has been faced while selecting one of the four properties or all properties is the selection and use of accurate valuation criteria so that Deright would make actions to make appropriate purchases of property to be hold for a certain time period and selling it in the future whenever the value of investment would be able to earn capital gains. Hoverer, the assessment of resources includes many factors such as interest rate, tax rate and inflation rate would be fluctuated and the projected value of property could get changes at the time of making sales. Therefore, Angus Cartwright should consider this necessary information and the achievement of outcome could satisfy the demand of investors and buyers.

ANGUS CARTWRIGHT IV Harvard Case Solution & Analysis

 

 

Analysis

Valuation of properties:

As per the following considerations, each property has been valued according to the rules and values which have been performed by Angus Cartwright. In order to demonstrate the key factors, such as space for cash flows and taxes along with their benefits including interest ratean appropriate method has been applied to calculate the results. Therefore, to crucially analyze the value of each property and to make certain assumptions regarding holding or selling any property, a concept named “Arm’s LengthTransaction” has been applied in order to satisfy both buyer and seller. However, the main concern of valuations is for the investors and the buyers in order to pick suitable value option for the future earnings such as capital gains at the selling time...................

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