PLEASE SOLVE IN EXCEL WITH CALCULATIONS AS SOON AS POSSIBLE

An investor is considering the acquistion of a "distressed property" which is on Northlake Bank's REO list. The property js available for $250,000 and the investor estimates that he can borrow $200,000 at 8% 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

a) 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 may he consider?

b) The lendor now is concerned that if the property does not sell, he may have to carry the property for one additional year. He believes that he could rent it and realize net cash flow before debt service of 1,200 per month. However, he would have to make an additional $12,800 in interest payments on his loan during that time, and then sell. What would the price have to be at the end of year 2 in order to earn a 20 percent IRR on equity?

List in the spreadsheet the cashflows month by month and the calculation of the IRR that results in 20% return on your equity