1. Choose two different neighborhoods for different cities in two different stat

1. Choose two different neighborhoods for different cities in two different states in the US

and download 100 observations for each one for selling prices.

2. For this observations make a brief descriiption of each sample. Average price, attributes,

etc. Talk about the differences for both states. In this part it is expected you to look

for all the possibles differences that can explain the prices.

3. From every sample look for similar properties to get estimated monthly rents. The

idea is to get a proxy rent for different kind of apartments. Do the same descriiptions

that in the previous case.

4. Look for the average growth rate for the rent in the neighborhoods you chose.

5. Using the previous information get an estimate for the discount rate for each neigh-

borhood.

6. Discuss the differences for the different neighborhoods. Try to give possible explana-

tions for these differences.

7. Now, using the information from Redfin for the calculator, create the annual cash flow

for one of the properties in each neighborhoods. Try to use a vacancy rate that make

sense in every case. Use a 20% down payment for each case. Create these cash flows

for 40 years.

8. Compute a proper WACC for every property.

9. Compute the Net Present Value for each property and explain why in every case it is

profitable to invest your money or not.