Project Overview - Part Iii

PROJECT OVERVIEW Part I I.

Property Selection Criterion a) Within 5 miles of UTSA b) Neighborhood with amenities c) 4 bedrooms to maximize rents d) Priced less than $140,000 e) Property location - no high voltage power lines, not on busy corner, etc.

II.

Selection of Comparable Sales a) Selected 3 "model" matches or as close thereto b) Comparably priced c) Same subdivision, if possible, or very close in distance to subject

III. Completed Exhibit A - Market Data Grid for 12726 Huntsman View Drive a) Sales comp approach b) Using the asking prices and the 2009 BCAD values, compared subject property and comp features such as lot size, construction quality, property age, square footage, number of bedrooms and bathrooms, fireplaces, if any, garage spaces, porches, patios, decks, etc. IV. Completed Adjustment Grids for 12726 Huntsman View Drive a) Exhibit B-1 - Sales comp approach using BCAD values b) Exhibit B-2 - Sales comp approach using asking price c) Researched value websites eppraisal, zillow, and cyberhomes and used the bcad website to find most recent tax values d) Compared physical characteristics (site size, construction quality, age, living area, number of bedrooms and bathrooms, etc.) of the subject property and the 3 sales comps and made cost adjustments as needed to balance out characteristics e) Used our textbook and an actual appraisal to come up with cost adjustments, i.e., 1/2 bath, 1-car garage vs. 2-car garage, fireplace, etc. V.

Completed Reconciliation of Adjusted Final Sales Price a) C-1 - Determined weighted price using BCAD values b) C-2 - Determined weighted price using asking price c) Sale comp #1 received 60% weighting while comps #2 and #3 received 20%

VI.

Chain of Title a) Used bcad.org to look up book and page number info for title purposes b) Used book and page number at the Bexar County Clerk's website, wam1.landata.com, to get complete title info c) Chain of title evidenced an original purchaser and then the foreclosure of the property by the bank

VII.

Sales Comps a) Took photos of all three sales comps b) Used the googlemaps website to provide driving directions from the subject property to the comps c) Printed out maps with labels and driving directions from one property to the next

VIII.

Summary of Quantitative and Qualitative Attributes a) Used realtor.com and mysanantonio.com/realestate websites to locate the property attributes, as well as our knowledge of the general area Part II

I.

Researched and Identified 3 Rental Comps a) Selected "model" matches, or as close thereto b) Same subdivision, if possible, or very close in distance c) Conforming properties (nothing out of the ordinary) d) Took pictures of subject property and the 3 rental comps e) Used googlemaps website to print out color maps with properties pinpointed

II.

Performed Rental Comp Analysis a) Used realtor.com and mysanantonio.com/realestate websites to gather properties' info b) Compared subject property to the 3 rental comps using the number of bedrooms, number of bathrooms, property and lot square footage, property condition, and distance to/from the subject property and completed an analysis table c) Based upon analysis, determined the proposed rental rate to be $1,150/month III.

Extracted Cap Rate from Comparables a) Used the bcad.org website to get our property taxes b) Used a (high) estimate for hazard insurance from another comparably priced home

IV.

Valuation of Subject Via Direct Capitalization a) Used bcad.org b) Used Real Estate Principles Book to figure out the equations and some of the numbers V.

Valuation of Subject Via Gross Income Multiplier Method a)

Part III I.

Determined Loan Type and Closing Date for Subject Property a) Loan type - Conventional b) Closing date - Wednesday, December 30, 2009

II.

Completed HUD-1 a) Used the website hud.gov/offices/hsg/ramh/res/respa_hm.cfm as a template for our HUD-1. Set up HUD-1 form in Excel, typing in all fields as listed on the website's HUD-1 template b) Completed Buyer's side of the HUD-1 1. Used data given to us in class, research from a title company, another property's HUD-1, etc., to complete this portion c) Completed Seller's side of the HUD-1 1. Used title company data and the Seller's Deed of Trust to complete this portion 2. Seller pays 6% real estate commission 3. Seller pays one-half of escrow and the deed preparation 4. Seller pays for seller's title policy, recordation and document delivery

III.

Completed ProForma a) b) NOI computation c) After tax cash flows