Real Estate Math
A Washington income property has a NOI of $55,000 and the investor requires a 7% cap rate. What is the maximum the investor should pay?
A$650,000
B$720,000
C$785,714✓ Correct
D$800,000
Explanation
Maximum price = NOI ÷ Cap Rate = $55,000 ÷ 0.07 = $785,714. To solve this, multiply the relevant values: $55,000 at 7%.. The correct answer is $785,714.. This is a common calculation on the Washington real estate exam.
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