Real Estate Math

A Colorado property has an NOI of $55,000 and sold at a 7.5% cap rate. What was the purchase price?

A$412,500
B$550,000
C$733,333✓ Correct
D$825,000

Explanation

Purchase price = NOI ÷ Cap rate = $55,000 ÷ 0.075 = $733,333.

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