Create a real estate investment plan based on the following information. Use Cap Rate, NOI, and Cash on Cash return to determine which is the best investment strategy and why.

1. Your terms:

a. 100,000 in funds

b. Credit line of 200,000 (loans terms are minimum 20% down payment, LTV is 70%)

c. 30-year mortgage fixed Interest rate for credit is 3.50%

d. 15-year mortgage fixed interest rate for credit is 2.50%

e. Balloon rate 2% for the first 6 months; rises to 9.99%

f. All square footage for properties are the same for single family homes. (SFH)

2. Basics

a. Population- Growing at a rate of 6% per year.

b. Sales of SFH are taking place within 4 months of listing.

c. Economy - second stage of economic cycle

d. Residential vacancy rate - 90%

3. Residential

a. Single Family Homes

i. Three bedroom, two bathrooms;

ii. Purchase Price: 200,000;

iii. After Renovation Value: 300,000;

iv. Investment amount needed to achieve higher value: 50,000;

v. Comparables in the area if renovated: 315,000;

vi. Rent: 1500.00 per month before renovations, 2500.00 after renovations per month;

vii. Operating Expenses to include or consider: maintenance of property is about 5% of rent, 10% of rent to utilize a management, and presume tenants pay all utilities;

viii. Close to schools and supermarkets