Real Estate Math
A South Dakota investor wants a 10% cap rate on a property with an NOI of $45,000. What is the maximum price the investor should pay?
A$400,000
B$450,000✓ Correct
C$500,000
D$350,000
Explanation
Maximum price = NOI ÷ Cap Rate = $45,000 ÷ 0.10 = $450,000.
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