Real Estate Math

A Maine property investor's debt service on a $400,000 property loan is $2,800/month. The monthly NOI is $3,500. The monthly cash flow is:

A$500
B$700✓ Correct
C$900
D$1,100

Explanation

Monthly cash flow = NOI − Debt Service = $3,500 − $2,800 = $700. Using the values given ($400,000, $2,800), apply the appropriate formula.. The correct answer is $700.. This is a common calculation on the Maine real estate exam.

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