Real Estate Math
An Oklahoma investor pays $625,000 for a property producing $68,750 NOI. They can sell a similar property for $650,000 when its NOI is $71,500. What is the approximate cap rate used in both transactions?
A11%✓ Correct
B10%
C9%
D11.5%
Explanation
Cap rate for first property: $68,750 ÷ $625,000 = 11%. Cap rate for second property: $71,500 ÷ $650,000 = 11%.
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