Real Estate Math
A Massachusetts investor buys a 10-unit building. All units rent at $1,200/month. Annual operating expenses are $72,000. At a 7% cap rate, what is the estimated value?
A$1,028,571✓ Correct
B$1,200,000
C$900,000
D$857,143
Explanation
Annual gross rent = 10 × $1,200 × 12 = $144,000. NOI = $144,000 − $72,000 = $72,000.
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