Real Estate Math
A Kentucky commercial property has an asking price of $1,200,000. The NOI is $90,000. A buyer wants a 9% cap rate. How much should the buyer offer?
A$1,000,000✓ Correct
B$950,000
C$810,000
D$1,050,000
Explanation
Value at 9% cap rate = NOI / Cap rate = $90,000 / 0.09 = $1,000,000.
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