Question

Please Give me a peer review for next report :

Introduction: My husband and I, have bought a land in Lebanon since 2014, and we have always wanted to invest in it. The land sits in a relatively good residential area and can be potentially a good location for a residential building construction Though it has never been a great time for us to invest, Lebanon's political situation has been always too critical, Lebanon is facing a refugees crisis, the political situation has been insecure, and so the economy. Having said that, it is very risky to put some serious cash in the country At the beginning of this year, we had a son, and some plans have changed, now our need to be around a family is rising, we are going home more often, and we need at least a place to stay. We started considering more our investment in the land. For that, we have run a quick market research and we have met some investors and developers to generate a general idea about the market and the options we have for our possible investment In this paper, I will go briefly thru the market research and explore our possible options, running a decision analysis using the decision tree, and later be dealing with the uncertainty with sensitivity analysis, in order to get to the most logical solution for our confusing decision. Background: Based on an initial site analysis, and following the building code of the municipality in the zone, the land has the potential to occupy a 2200m2 residential building, where the mass plan area doesn't exceed 440m2 Therefore, as per the initial concept design, the 4-story building has the potential to occupy 3 apartments per floor, 140m2 each. So in total, we have 12 apartments of 140m2 each. The construction cost for a regular residential building (with stone cladding, and without luxury finishing) is 450$/m2 so if we do the math (12x140x450 756.000), our building cost will be 756.000S$ ighlights As I have previously said, Lebanese economy wasn't really doing so well lately, therefore the apartments price has dropped. In the area of study, for a regular finishing residential Price per meter: 870$/m2 building, the price per meter is 870$/m, when the apartment isApartment sizes:140m2 completed. In addition, we have the option to sell some Total apartment price ( when apartments off plan, therefore we can reduce our investment completed) 121,800 cost, the off-plan apartments are sold at 70% of the original | Total apartment price off- price, so they are basically sold at 600$/m, which means the plan: 84.000$ off-plan apartment size will be 600x140- 84.000$ While in Lebanon we have also met some investors and developers who expressed their interest in the project. Another option rise, so we can possibly give the project to a developer/ investor, in this case the developer takes 65% of the apartments and give us only 35% when construction is completed. So we will technically own 4 apartments but we still have to pay for the permit paper work which will cost us a total of 20.000$ Today, we still didn't make any decision, our land is still on hold, and we are studying our options

Answer 1

The objective of this report is quite clear. The author wants to back the decision of his investment of a land, bought in Lebanon. It is clever of the author to conduct decision tree analysis and sensitivity analysis as they give a holistic idea for making the financial decision.

The methodology used for sensitivity analysis is quite apt and easily understandable. However the author was required to give small case snippets or a brief summary to make the decision tree analysis more comprehendible. A factor analysis could also be included to analyze the factors, which may affect this financial decision.

The final decision taken based on all the analysis has not been clearly highlighted. We can make out the results of the individual analysis decision. A combined decision based on the results of both decision tree analysis and sensitivity analysis needed to be included as the conclusion part.

Overall, I would give a 6 out of 10 to this report.