FINANCE CLASS

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Group Info

REAL 320 Principles of Real Estate
Assignment #1
PROJECT PROFILE
Group 1
Adults in Household 1
Children in Household -
Desire to have children None
Working Adults 1
Household Income (Annual) 72,000
Credit Score Good
Student Loans 60,000
Car Loans 20,000 5 year loan = 333.33 per month
Condition of Cars 1 Good
Credit Card Bills 8,000
Amount in Savings 50,000 35,000 from parents + 5,000 from savings = $40,000 down payment for 200,000 house.
Gift from Parent for use to purchase home 35,000
Total Savings & Parent Gift (Cash On Hand) 85,000
As long as you have 6-9months worth of cash in your savings (if shit hits the fan) then we are good.

Assignment One

Suggested Budget
–Housing (20%-35%): Rent or Ownership Expenses
–Food (15%-30%): Groceries & Eating out
–Transportation (6%-20%): Car Payment, Insurance, Gas, Maintenance
–Medical Costs (2%-6%): Medical/Dental/Vision/Chiropractor Office Visits, Rx, Glasses
–Insurance (4%-6%): Life, Disability, Renters, Umbrella
–Utilities (4%-7%): Water, Power, Cable, Internet, Phone, Cell
–Clothing (3%-10%): Professional, Casual
–Personal Care (2%-4%): WalMart/Target Supplies
–Miscellaneous (1%-4%): Recreation, Travel, Vacation, Culture, Furniture
–Savings (10%+)
–Charitable Giving (10%)
–Child Care and/or Private Education for Children
–Debt Repayment (Credit Cards, Other Debt)
http://www.trulia.com/property/3106204684-4180-Louisiana-St-1H-San-Diego-CA-92104#photo-18
Our Budget - Year One Annual Monthly Allocation of
After Tax Income
Income 72,000 6,000 0
Post Tax Income 49,860 4,155 0
Housing 11,966 997 24%
Food 9,972 831 20%
Transportation 4,986 416 10%
Med. Cost 1,994 166 4%
Insurace 2,493 208 5%
Utilites 2,493 208 5%
Clothing 1,496 125 3%
Personal Care 1,496 125 3%
Miscellaneous 1,496 125 3%
Savings 4,986 416 10%
Charity 2,493 208 5%
Debt Payment 1,496 125 3%
Expenses 47,367 3,947 94%
Money remaining 2,493 208 5%
reimbursement 4,761.12
Our Budget - Year Two-3.5% Increase in Salary Annual Monthly Allocation of
After Tax Income
Income 74,520 6,210 0
Post Tax Income 51,605 4,300 0
Housing 11,966 997 23%
Food 9,972 831 83%
Transportation 4,986 416 50%
Med. Cost 1,994 166 40%
Insurace 2,493 208 125%
Utilites 2,493 208 100%
Clothing 1,496 125 60%
Personal Care 1,496 125 3%
Miscellaneous 1,496 125 3%
Savings 4,986 416 42%
Charity 2,493 208 25%
Debt Payment 1,496 125 30%
Expenses 47,367 3,947 584%
Money remaining 4,238 353 8%
reimbursement 4,761.12
Our Budget - Year Three-3.5% Increase in Salary - Lets do vacation? Annual Monthly Allocation of
After Tax Income
Income 77,128 6,427 1726.4025
Post Tax Income 53,411 4,451 1,036
Housing 11,966 997 22%
Food 9,972 831 83%
Transportation 4,986 416 50%
Med. Cost 1,994 166 40%
Insurace 2,493 208 125%
Utilites 2,493 208 100%
Clothing 1,496 125 60%
Personal Care 1,496 125 100%
Miscellaneous 1,496 125 100%
Savings 4,986 416 333%
Charity 2,493 208 50%
Debt Payment 1,496 125 60%
Expenses 47,367 3,947 1124%
Money remaining 6,045 504 11%
reimbursement 4,761.25
Our Budget - Year Four-10% Increase (Job Promotion) - Vacation for suree Annual Monthly Allocation of
After Tax Income
Income 84,841 7,070 3452.805
Post Tax Income 58,752 4,896 1,726
Housing 11,966 997 20%
Food 9,972 831 83%
Transportation 4,986 416 50%
Med. Cost 1,994 166 40%
Insurace 2,493 208 125%
Utilites 2,493 208 100%
Clothing 1,496 125 60%
Personal Care 1,496 125 100%
Miscellaneous 1,496 125 100%
Savings 4,986 416 333%
Charity 2,493 208 50%
Debt Payment 1,496 125 60%
Expenses 47,367 3,947 1122%
Money remaining 11,386 949 19%
reimbursement 4,761.50
Our Budget - Year Five-3.5% Increase - Vacation Annual Monthly Allocation of
After Tax Income
Income 87,810 7,318 3452.805
Post Tax Income 60,809 5,067 1,726
Housing 11,966 997 20%
Food 9,972 831 83%
Transportation 4,986 416 50%
Med. Cost 1,994 166 40%
Insurace 2,493 208 125%
Utilites 2,493 208 100%
Clothing 1,496 125 60%
Personal Care 1,496 125 100%
Miscellaneous 1,496 125 100%
Savings 4,986 416 333%
Charity 2,493 208 50%
Debt Payment 1,496 125 60%
Expenses 47,367 3,947 1121%
Money remaining 13,442 1,120 22%
reimbursement 4,760.53
http://www.valuepenguin.com/average-cost-of-homeowners-insurance Homeowners Insurance: 80.85 *Increase 2% each year-estimation
http://www.welcometosandiego.com/for-buyers/california-property-tax-info/ Property Tax 183.3333333333 *Increase 2% each year
http://budgeting.about.com/od/budget_home/a/How-Much-Should-You-Budget-For-Home-Maintenance-And-Repairs.htm Maintenance 166.6666666667
Principle+Int 740
Housing Cost 1170.85
http://www.valuepenguin.com/average-cost-of-insurance Car insurance 164
Tax Notes -
3,950 exemption per person (1)
Itemized vs. Standard Deduction
Home mortgage interest
State and local income taxes or sales taxes (but not both)
Real estate and personal property taxes
Gifts to charities
or
6,100 (standard deduction for a single TP)
Income 72,000
<Exclusions>
Gross Income 72,000
<Deductions for AGI> (interest on student loans)
AGI X
Less--Greater of:
(1) <Itemized Deductions>; or (8,856.96 hml+2,493 char+183.33 prop tax (x 2% each year) 11,533.29
(2) <Regular SD + Additional SD>
<Exemptions> -3,950
Taxable Income 56,516.71
*.6925
17,378.88 in taxes for Yr 1
Year one tax reimburssement = 72,000- 17,378.88 = 54,621
54,621-49860
4,761.12 positive difference
Year two = 74520 - 18,153.88 = 56,366
56,366 - 51,605
4,761.12 positive difference
Year three = 77,128 - 18,955.75 = 58,172.25
58,172.25 - 53,411
4,761.25
Year four = 84,841 - 21,327.50 = 63,513
63,513-58,752
4,761.50
Year Five = 87,810 - 22,240 = 65,569.54
65,569.54 - 60,809
4,760.53
http://www.trulia.com/property/3106204684-4180-Louisiana-St-1H-San-Diego-CA-92104 http://www.valuepenguin.com/average-cost-of-homeowners-insurance http://www.welcometosandiego.com/for-buyers/california-property-tax-info/ http://budgeting.about.com/od/budget_home/a/How-Much-Should-You-Budget-For-Home-Maintenance-And-Repairs.htm http://www.valuepenguin.com/average-cost-of-insurance