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

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