1. A comparable home has a property value of $200,000. It has an extra bedroom compared to the subject. The appraiser estimates this accounts for a $15,000 difference in value between the two properties. The subject property has a larger garage, which is worth an extra $2,000 in value. Considering these factors, what is the subject's adjusted property value? 2. What is the gross income multiplier of a house that rents for $1,200 each month and would sell for $150,000? 3. The income approach to property valuation is useful for what kind of buyer? Retirees Rental real estate investor First time homebuyer 4. You have an opportunity to acquire a property from First Capital Bank. The bank recently obtained the property from a borrower who defaulted on his loan. First Capital is offering the property for $200,000. If you buy the property you will have to (1) spend $10,500 on various acquisition-related expenses and (2) exactly $2,000/month during the next 12 months for repairs in order to prepare for the sale. Because First Capital Bank would like to sell the property as soon as possible, it is willing to provide a 90% LTV mortgage at 8% for one year interest only. You believe the property will sell for $270,000 at the end of one year. You will incur a 6% in selling costs. a. What is your expected annual return on this investment? 1- An investor is considering the acquisition of a "distressed property'' which is on Northlake Bank's REO list. The property is available for $200,000 and the investor estimates that the property will require the following total expenditures during the next year: Inspection $ 500 Title search 1,000 Renovation 13,000 Landscaping 800 Insurance 1,800 Property taxes 6,000 Selling expenses 8,000 The investor is wondering what such a property must sell for after one year in order to earn a 20 percent return