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Need some help for this problem Last week we discussed how a mortgage improves the investment return on real estate investments. This assignment focuses on
Need some help for this problem Last week we discussed how a mortgage improves the investment return on real estate investments. This assignment focuses on the investment return improvement when you buy real estate with a loan or mortgage. Please use the following data to compare the investment returns between an all cash purchase and a 95% financed purchase. The data is listed below: Purchase price: $1 million Real asset: 10 unit apartment complex Rent/month: $1,200 per unit Expenses: 30% of the gross income pays for insurance, taxes and maintenance. Financing interest rate: 7.00% per annum Financing maturity: 30 years Downpayment: 5% Amount financed: $950,000.00 Investment return horizon: 10 years Average annual Inflation rate: 4% Rent increases track annual inflation You will need to estimate the disposition of the real estate asset at year 10. Please calculate the annual mortgage payment with an on line mortgage calculator. Please submit this investment model in an Excel spreadsheet
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