Real Estate Math
A Texas investor needs a property to generate $50,000 annual NOI with a 7% cap rate. What is the maximum price they should pay?
A$625,000
B$700,000
C$714,286✓ Correct
D$750,000
Explanation
Maximum price = NOI ÷ Cap Rate = $50,000 ÷ 0.07 = $714,286.
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