Assess the feasibility of a purchase of a condo in the Seaport area of Boston by Claudette, who is a software developer working in the financial district of Boston.
Part 1
Create models, and tie them together to represent:
Monthly Budget of expenses for Claudette, including all expense categories Claudette will need to account for each month. (For example, groceries, transportation, etc.) Use a reasonable estimate for each expense.
Monthly income for Claudette, a software developer in Boston with 3-5 years experience, taking into consideration “take-home pay”. In other words, account for taxes and deductions.
On your favorite real estate site (Zillow, for example), find 3 condos in the Seaport area that may appeal to Claudette (or you find interesting), and use the data from the listing (HOA fees, parking, Boston taxes, etc) to add to the monthly budget in each scenario. (Do not use the mortgage payment calculated as part of the listing, instead calculate using Excel functions.)
Model the cost of the real estate investment, assuming a down payment of 15% coming from an inheritance.
Look up current mortgage rates, and use these findings in your mortgage model. (For example, choose a type of mortgage (fixed or adjustable), and a length of the loan (for example, 30 years). Use this current rate and mortgage vehicle to calculate the monthly mortgage payments.
Create a model that ties all of these components together, focusing on formatting and telling the story.
Questions to answer in your spreadsheet, making it clear what you are showing:
Can Claudette realistically afford to purchase any of the condos chosen?
What is the monthly cost of each of the properties, and what are the total monthly expenditures for Claudette?
Part 2
Choose 1 of these properties to expand further:
Include the full loan amortization table.
If Claudette holds this loan to maturity, what will be the total of all payments?
How much interest will Claudette pay over the life of the loan?
What is the total cost of the property?
If Claudette adds $200 / month in extra payment while paying back the loan, what is the impact on the number of months to payoff, and the total interest paid over the life of the loan?
Use formatting and organization of the workbook / worksheets / cells to help you tell a story in your model.
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