Angus Cartwright Case - Executive Summary
Portfolio Management & Advisory Services
Executive Summary
Recommendations for John DeRight & Judy DeRight
Prepared by, Vijay Sundar
* M.P.S in Real Estate, Class of ‘12
Cornell University, NY, USA
* B.E. in Civil Engineering, Class of '07
Anna University, Chennai, India Talk: +1 - 949-385-0403 Write: vs328@cornell.edu
Principles of Real Estate Development – HA6620 - Angus Cartwright / Assignment 4
John DeRight & Judy DeRight both members of the long standing DeRight family based in Arlington, Virginia are looking to diversify their portfolio of investments and are contemplating investing in real estate to achieve their investment goal. Both are in a different stages of their life and are considering one of the four real estate investment options available to them expecting an after tax minimum leveraged return of 12% on their investment. John DeRight was a business owner until recently when he sold off his business to another medium sized public company for $18 million worth of stock in that company. John wants to diversify his investments and is primarily looking for stable periodic returns that will comfortably accommodate his retirement lifestyle. John DeRight, currently in retirement, will have $9 million from the sale of stock to invest in a property. He is comfortable with his retirement savings, but would like to diversify his retirement funds in real estate. He requires a 12% return. John's networth is depicted in the chart below.
It can be seen that adding another investment vehicle, i.e. Real Estate here to his portfolio reduces his dependance on the performance of his stock which is currently comprised of 95% of his overall portfolio vis-a-vis 48% after the investment.
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Judy DeRight is the president and the sole stockholder of a small sized chemical company. Her company generates a minimum before tax return of $1.6 million and an after tax return of $1.1 million and it has been consistent throughout the last ten years.
Executive Summary
Recommendations for John DeRight & Judy DeRight
Prepared by, Vijay Sundar
* M.P.S in Real Estate, Class of ‘12
Cornell University, NY, USA
* B.E. in Civil Engineering, Class of '07
Anna University, Chennai, India Talk: +1 - 949-385-0403 Write: vs328@cornell.edu
Principles of Real Estate Development – HA6620 - Angus Cartwright / Assignment 4
John DeRight & Judy DeRight both members of the long standing DeRight family based in Arlington, Virginia are looking to diversify their portfolio of investments and are contemplating investing in real estate to achieve their investment goal. Both are in a different stages of their life and are considering one of the four real estate investment options available to them expecting an after tax minimum leveraged return of 12% on their investment. John DeRight was a business owner until recently when he sold off his business to another medium sized public company for $18 million worth of stock in that company. John wants to diversify his investments and is primarily looking for stable periodic returns that will comfortably accommodate his retirement lifestyle. John DeRight, currently in retirement, will have $9 million from the sale of stock to invest in a property. He is comfortable with his retirement savings, but would like to diversify his retirement funds in real estate. He requires a 12% return. John's networth is depicted in the chart below.
It can be seen that adding another investment vehicle, i.e. Real Estate here to his portfolio reduces his dependance on the performance of his stock which is currently comprised of 95% of his overall portfolio vis-a-vis 48% after the investment.
Page | 2
Judy DeRight is the president and the sole stockholder of a small sized chemical company. Her company generates a minimum before tax return of $1.6 million and an after tax return of $1.1 million and it has been consistent throughout the last ten years.