Real Estate Math
A Minnesota property has an annual NOI of $18,000. If similar properties are selling at a 7.5% cap rate, what is the estimated value?
A$225,000
B$240,000✓ Correct
C$260,000
D$200,000
Explanation
Value = NOI / Cap rate = $18,000 / 0.075 = $240,000.
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