Housing Options Bryce Hagen Gamal Burhum Vesna Eng Danny Luu Team 11

Buy a Used Home or Build a New Home A Comparison Based On Financial Conclusions

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

Assumtions  3.45% Inflation  10.0% Real Estate Return  10 year Analysis

Used House Location  2408 Ogden St.  San Bernardino, CA

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

New House Lot Location  2620 Kern St  San Bernardino, CA

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

Used House Initial Costs  $249, Purchase Price  $ Closing Costs  $ Advance Payments  $ Title Charges  $ Miscellaneous  $257, Total Initial Cost Sell the Home in 10 Years for $650,000.00

New House Costs  $26, Lot Price  $196, Const. Costs  $16, Month Rent  $8, Fees  $5, Architect  $253, Total Initial Costs Sell the Home in 10 years for $720,000.00

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

New Home Maintenance Costs  $0 for the First 10 Years

Present Worth Comparison  - $336, Total Costs  $277, PW of Sale  - $59, PWC New Home  - $370, Total Costs  $250, PW of Sale  -$119, PWC Used Home

Sensitivity Analysis  Increased Construction Costs  $110 - $200 Sq Ft

Sensitivity Analysis  Change in Used Home Price  $200k – 270k

Internet Resources  – Home Building Tips and Warnings  – Instructions for Building and Contracting  – Present Worth Analysis

Buy a Used Home or Build a New Home Any Questions?