An investor is considering the acquisition of a distressed property which is on Northlake Banks REO list. The property is available for $200,000 and the investor estimates that he can borrow $160,000 at 8 percent interest and that the property will require the following total expenditures during the next year:

Inspection $ 500

Title search 1,000

Renovation 13,000

Landscaping 800

Loan interest 12,800

Insurance 1,800

Property taxes 6,000

Selling expenses 8,000

The investor is wondering what such property must sell for after one year in order to earn a 20 percent return (IRR) on equity. What other issues must he consider?