Excel Question: turn in your final spreadsheet with the assumptions you use for purchase price and rents. Redfin.com: FOR SALE - ACTIVE 2758 36th Ave,San Francisco, CA 94116$1,488,000Est. $10,265/mo Get pre-approved2Beds2.5Baths1,725Sq Ft and search for a house that is for sale in a market where you have a good idea for rental rates (e.g. Davis if you are in touch with Davis per-bedroom rental rates, or else find a house in your hometown where you might be familiar with market rates of rent) - this identified property will serve as your "Subject Property" Along with the purchase price and estimated rental rates, please use the following assumptions for the purposes of your analysis: Closing costs = 1% of purchase price Interest Rate = 4%, 80% LTV, 30yr fully amortized Home Price Appreciation = 5% Annual Rent Increase = 4% Homeowners Insurance = $1,000/yr (increases 4% each year) Property Taxes = 1.2% of purchase price (increases 2% each year)

Water, Sewer, Garbage = $80/mo (increases 5% each year) Annual Maintenance = $2,000 (increases 4% each year) Depreciation: Tax Life = 27.5 years Depreciation: Building = 80% of Total House Price Marginal Tax Bracket = 40% Capital Gains Tax Rate = 25% A. Make sure your spreadsheet shows a First Year Operating Projection, 10 Year Operating Projection, Sales Analysis After 10 Years and Rate of Return Analysis After 10 Years B. Once you have completed your spreadsheet and have found your IRR, play around with the variables for Appreciation, Annual Rent Increase and Interest Rate on the loan. Changing each of these variables up or down by 1%, which one makes the biggest impact on IRR?

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