Real Estate Math

A Hawaii property has an NOI of $95,000. If the investor requires a 6.5% return, what is the maximum price they would pay?

A$1,300,000
B$1,461,538✓ Correct
C$1,500,000
D$1,600,000

Explanation

Value = NOI ÷ Cap Rate = $95,000 ÷ 0.065 = $1,461,538.

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