Real Estate Math
A property in Wilmington, NC has a 7% cap rate and generates an NOI of $42,000. What is the estimated value?
A$500,000
B$560,000
C$600,000✓ Correct
D$630,000
Explanation
Value = NOI / Cap Rate = $42,000 / 0.07 = $600,000. To solve this, multiply the relevant values: $42,000 at 7%.. The correct answer is $600,000.. This is a common calculation on the North Carolina real estate exam.
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