Mr. Tyson is deciding whether to purchase an investment property that he estimates to have operating costs of $325,000 per year, gross potential income of $500,000, and a vacancy rate of 7.5%. A similar property with an NOI of $122,000 recently sold for $1,000,000. What is the estimated value of this building?
A)$137,500
B)$325,000
C)$1,122,392
D)$1,125,343
E)$1,127,049

Question

Quizplus · Accepted Answer

The Answer of Mr. Tyson is deciding whether to purchase an investment property that he estimates to have operating costs of $325,000 per year, gross potential income of $500,000, and a vacancy rate of 7.5%. A similar property with an NOI of $122,000 recently sold for $1,000,000. What is the estimated value of this building?
A)$137,500
B)$325,000
C)$1,122,392
D)$1,125,343
E)$1,127,049

Mr Tyson Is Deciding Whether to Purchase an Investment Property