Real Estate Math
A Louisiana commercial property has annual gross income of $180,000 with operating expenses at 35% of gross income. Using a 7% cap rate, what is the estimated value?
A$1,671,429✓ Correct
B$2,571,429
C$1,800,000
D$1,500,000
Explanation
Operating expenses = $180,000 × 35% = $63,000. NOI = $180,000 − $63,000 = $117,000.
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