Real Estate Math
An investor's property has an asking price of $650,000 with a NOI of $52,000. A buyer wants a 9% cap rate. How much should the buyer offer?
A$52,000✓ Correct
B$596,000
C$625,000
D$650,000
Explanation
Buyer's offer = NOI ÷ desired cap rate = $52,000 ÷ 0.09 ≈ $577,778. To solve this, multiply the relevant values: $650,000 and $52,000 at 9%.. The correct answer is $52,000.. This is a common calculation on the Nebraska real estate exam.
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