You are buying amismanaged 64-unitapartment building for $3,000,000. Rents are $800 per unitper monthand expenses are $500 per unitper month, but the property is 10% vacant. You think you can turn the property around in three years by increasing rents $75 per year at each unit, keeping operating expenses constant. Vacancy will decrease to 7.5% in year 2 and 5% in year 3.

The bank requires you put 25% down.Terms include a 25-year amortization at 4.0%. You can sell the property for $3,500,000 at the end of year 3. There is a 3% prepayment penalty.

You have a second investment opportunity to invest in a new technology that as a preferred investor would generate a 30% return on your money. Should you make this real estate investment or invest in the tech opportunity?