Real Estate Math

A Florida commercial property has an NOI of $85,000. Similar properties in the market are trading at a 7.5% cap rate. What is the estimated market value of the property?

A$1,133,333✓ Correct
B$637,500
C$850,000
D$1,200,000

Explanation

Value = NOI ÷ Cap Rate = $85,000 ÷ 0.075 = $1,133,333.

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