Property Management
A North Dakota commercial property with multiple tenants that generates positive cash flow after debt service and all expenses is said to have positive:
ANOI
BCash flow (before-tax cash flow)✓ Correct
CGross income
DCapitalization rate
Explanation
Cash flow (before-tax cash flow) is NOI minus debt service (mortgage payments). A positive cash flow means the property generates more income than it costs to operate and finance, providing income to the owner.
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Key Terms to Know
Net Operating Income (NOI)
The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Math Concepts
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