Real Estate Math
A New Mexico investor pays $650,000 for a commercial building and expects an 8% cap rate. After 3 years, if the cap rate remains at 8% and the NOI increases by 10%, what would be the new estimated value?
A$572,000
B$702,000
C$715,000✓ Correct
D$728,000
Explanation
Initial NOI = $650,000 × 0.08 = $52,000.
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