1. You pay $1m for a property with 9% cap rate, keep it for 5 years, and sell at the end of year 5 at the same cap rate. The selling costs are 5% of the price. What is your IRR? Enter your answer in percent, but without percent sign.

2. You are doing the same as above but instead of paying cash, you take a 70% LTV IO loan at 5% annual rate. What is your IRR?

3. In addition to the loan above you take a mezzanine IO loan of $200k at 8% annual rate. What is your IRR? The neighborhood is declining, so your selling cap rate is 11% in questions 10-13. You have limited liability: you can walk away anytime. If you walk away in year t, all cash flows starting year t become zero (including year t).

4. You pay cash as in Question 1 above. What is your IRR? 5. You take the loan as in Question 2 above. What is your IRR?

6. You take an additional mezzanine loan as in Question 3 above. What is your IRR?