Real Estate Math

A Wyoming investor buys a property for $350,000 with a 25% down payment and an 8% cap rate. The annual NOI is:

A$7,000
B$28,000✓ Correct
C$70,000
D$350,000

Explanation

NOI = Value x Cap Rate = $350,000 x 8% = $28,000. The down payment amount is irrelevant for calculating NOI—it affects equity and cash-on-cash return calculations, but NOI is a property-level metric independent of financing.

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