Document Type

Closed Project

Publication Date

Winter 2006

Instructor

Dundar Kocaoglu

Course Title

Decision Making in Engineering and Technology Management

Course Number

EMGT 530/630

Subjects

Flipping (Real estate investment) -- Decision making, Dwellings -- Remodeling -- Oregon -- Portland, Decision making -- Methodology

Abstract

Our decision model is intended to answer a critical question for a small real estate investment company: Which house will deliver the highest short-term return on investment. Our company purchases, upgrades and resells homes for profit in a short period of time. The goal of this project was to build a flexible decision model to help determine which house among several alternatives has the greatest profit potential. The user can tailor the model to any market of interest by updating the various model inputs.

The ultimate output of the model is a decision of which property to purchase, given several options, and what upgrades and repairs to undertake on the house in order to maximize profit. Upgrades and repairs are a key component of the decision, and an optimization model was created to maximize the return of investment into a particular property. The optimization model allows us to determine which projects should be carried out for each house for the largest return, given a budget of labor hours and money. Available time and money are the constraints that determine which projects we will do personally, and which ones we will subcontract.

Additional factors are involved in the decision of which house to purchase, such as initial cost, current mortgage rates, estimated resale value, and estimated time to close. These conditions and estimates, when combined with the optimization model, result in a decision of which house to purchase.

Description

This project is only available to students, staff, and faculty of Portland State University

Persistent Identifier

http://archives.pdx.edu/ds/psu/23350

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