Real Estate Investments Essay
As a real estate investor using the scenarios provided on the accompanying Excel spreadsheet, it is clear that Client 3 will be paying the least amount of interest on his loan of $35,000 from me. This is due to the fact that the money will be repaid in one year so although this client receives the largest sum at the highest rate of interest, the total amount of funds paid back as a percentage is less (at 10% more than the original loan amount). Client 1 has the smallest monthly payments due for his loan amount but he also pays the greatest amount of interest.
Client 3 stands to gain the most from my investment in his real estate ventures as he is receiving the benefit of the largest amount of money lent to him as well as paying the least amount of interest to satisfy his debt. However, the larger monthly payment also makes Client 3 more susceptible to being unable to make the payments as scheduled. Client 2 ends up with monthly payments of only half this amount while paying a mere $600 more in interest over the life of the loan, so should monthly income be a concern,
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Client 1, with a safe and reasonable monthly payment amount, is most secure in being able to make his monthly payments but also ends up paying the most in interest, at nearly 25% of the original loan amount.