Having lived for several years in rental apartments, Jeff and Mary had concluded that paying rent was not building them any capital. Nor was it providing any tax benefit (mortgage interest payments, unlike rental payments, would be tax-deductible). Jeff was a graduate of a well known eastern business school who had been working for three years in the real estate industry. Mary was an architect with experience in rehabilitation projects. With their joint income of $80,000 they now wanted to own their own home.

Jeff also hoped that their financial objectives might be met as part of a larger real estate development. Perhaps a property could be acquired and converted into several smaller units either for sale as condominiums, or as rental units additional to their own. He thought this would be good experience and improve his personal track record in real estate. He thought that there were many ways he and his wife could add value to a project -they had experience with design and construction, and both felt willing to undertake part of any work themselves. Further, they had savings of $40,000 available, which they thought should be ample equity for their purposes.

Jeff and Mary had chosen Charlestown as a location after extensive discussion and research on the alternatives. Both of them worked in downtown Boston and wanted to avoid a long commute. They believed Boston's urban revitalization would continue and would provide increased appreciation in real estate values in the inner urban areas. Jeff felt that the pressure of demand would inflate values in urban areas more rapidly than in suburban locations.

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