Assignment 4

Putting Economics Analysis to Work (Rough Draft)

Arthur Limehouse

Brandman

Economic Analysis for Managers

BUSU 620

Judy Justice

October 20, 2014

Putting Economics Analysis to Work

Assignment #4 – DRAFT

Introduction: Owning real estate has always been a goal of mine. As a boy I watched my uncle and other members of my extended family grow rich through land speculation, selling and buying homes to rent. After I retired, I took stock of my wife’s and my financial situation. I determined that as long as my wife worked we could live comfortable. But this would change in three years when she too would retire. Unfortunately, she does not have a Government Pension like I do. So we decided that we had to look for other opportunities.

After doing our research, we decided that home rentals would fit our live style. We settled on the Yelm real estate market consists of a diverse mixture of housing developments. Some of these have numerous building restrictions while others have few or no building restrictions for the property. Therefore, it is not uncommon in the unincorporated areas of Thurston County for there to be a mixture of stick built homes and of manufactured homes. We determined that there was opportunity if we started off small and built our holdings one deal at a time to limit our expenditures. Therefore my wife and I decided to invest $150,000 in real estate.

Step 1: Define the Problem:

I. Where to invest:

A. Northeast Thurston County (Tenino/ Rainier/Yelm)

B. South Pierce County (Roy/McKenna)

II. Do we use an Agency?

A. The downsize is that they can be pricey. Their commission would be $200.00 per month.

B. They would screen the applicants

C. They would handle tenant problems

D. They would handle the rent payments

E. For a fee of $1000 they would find a tenant and we could handle the tenant interaction....