Use the following to answer questions 9-12.

Five years later, you are offered your dream job in Costa Rica. You need to sell this house in order to purchase a new one where you are moving. Rents have increased since you purchased the home and you estimate that the home will rent for $1700 per month (net). You have found a high quality tenant willing to sign a five year lease under the following conditions. Rent will be $1,700 for the first three years, and increase to $2,000 for the remaining two years. The average investors holding period on residential rental properties is five years. You have estimated sale proceeds will be $339,427 at the end of the investors holding period. The appropriate discount rate is 4.25%.

9. What is the minimum price you should list the property for (i.e. the maximum an investor would be willing to pay)? Round up to the nearest whole dollar. *Remember, the value of an investment property comes from its cash flows. That is, you need to consider both the estimated proceeds at the end of the holding period AND the stream of cash flows the investor will receive from rent while they own the property.

10. What will the investors going-in IRR be if they pay exactly list price? Round to two decimal places.

11. Assume your original loan amount was $246,296 and that you have been making payments of $1,000 per month. You will close on the home after making your last payment in year 5. How much will your loan payoff amount be (in other words, what is the outstanding balance on your loan after 5 years)? Round to the nearest whole dollar.

12. Assuming you sell the home for exactly list price, pay a 6% real estate broker commission and $4,500 in Seller closing costs, what will be your net proceeds from the sale? Round to the nearest whole dollar. *dont forget to include your loan payoff amount!

Use the following to answer questions 13-14.

You are starting to have second thoughts about moving. After going back and forth for several weeks you decide that you will make a decision based on whether or not you will refinance the house. If you refinance you will stay, if you dont you will move. You can refinance the home with a new interest rate of 3.75% for a 30 year term. You will refinance on the same day you would have closed on the home (so you can use the outstanding loan balance you calculated in #11 here). The cost of refinancing is 4.8% of the loan amount. Assume you anticipate selling the home (or refinancing again) in 7 years.

13. What is the net benefit of refinancing? Round to two decimal places. *Hint you are solving for net benefit of refinancing, not solving for NPV (so you do not need a discount rate to answer this question).

14. Will you be moving to Costa Rica?

A) Yes

B) No

Please answer all parts of questions since they connect! Please and thank you