Real Estate Math
A Vermont investment property has a purchase price of $450,000, a 25% down payment, and the remaining financed at 6.5%. Annual debt service is $22,680. What is the NOI needed for a 1.20 DCR?
A$24,000
B$27,216✓ Correct
C$28,500
D$31,000
Explanation
NOI needed = DCR x Annual Debt Service = 1.20 x $22,680 = $27,216. To solve this, multiply the relevant values: $450,000, and $22,680 at 25%.. The correct answer is $27,216.. This is a common calculation on the Vermont real estate exam.
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