HAND in ALL parts including this page$-$ Show All WorkWe have a Luxury property near UNT $$under contract$/$option to buy$$ for $60$ days at $$675,000($contract price$).$ The bank will lend us $80\%$ to buy the property. Details of the transaction andinvestment we will consider buying during the $$contract$/$option$$ period as follows:The ESTATE Living Boarding House is almost new!$1.$Assume rent at $$700$ per month per units $(10$ units$)$ or $$7,000$ per month total$\mathrm{.}2.$The proposed loan is for $30$ years at $4\mathrm{.}35\%$ interest with annual paymentsand a loanconstant of $\mathrm{.}057830$ or K$=\mathrm{.}0578303.$Assume $5\%$ vacancy for $3$ years. It$$s a university town!$4.$Expenses shall include outside professional property management fees of $7\%$ for totalpotential rent per year $($assume fully leased$).$ Other expenses, taxes, insurance, andmaintenancewill total $$26,500$ of gross income the first year$5.$The investor$$s IRS tax bracket is $35\%$ for $3$ years$6.$The land is $20\%$ of acquisition of effective total price of $$675,000$ at $27\mathrm{.}5$ yeardepreciation or $100\%-$: $27\mathrm{.}5=3\mathrm{.}636\%/$year$7.$Appreciation is $10\%$ the first year, UNT is growing and prices of Luxury Estate Unitrents and parking are going up $($free parking for tenants$)8.$Assume $$safe rate$$ or reinvestment rate for the financial manager$$s rate of return is amoney market fund of $3\mathrm{.}5\%9.$Assume an increase of rents at $10\%$ per year for $3$ years with FLAT expenses for the sameperiod$10.$ The resale price is based on a future CAP rate of $4\%$ based on net operation income$($NOI$)$ in year $3($We sell in year $3!$ No CAP Gains Tax assumed$)11.$ Resale expenses in the year we sell are $5\%$ in year $3.$ We sell in $3$ years $($Commissionsand closing costs$)12.$ Assume no CAP Gains Tax in year of same. We will work on that in class$\mathrm{.}13.$ Reinvestment rate for Rates and safe#$11$ is $3\mathrm{.}5\%$

I.Calculate $9$ rates of return and at least diagram #$10$ IRR and #$11.$Show your workand diagram. Rates $1-8$ are only ONE$-$year RATES of Return.II$.$Is this a $$good$$ deal? Should we buy it$?$ Yes or No$?$III.If the vacancy rate is zero in the first year, does this change your opinion? How muchdoes it improve the cash flowthe first year if fully occupied