An investor is interested in buying an apartment building. The asking price is $400,000. The building contains 10 units, each of which rents for $500 per month. The vacancy rate is 5%. The annual expenses are $27,000. The investor feels comfortable with a 8% capitalization rate. Is the asking price reasonable for this investor? If not, what price should he offer?

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The Answer of An investor is interested in buying an apartment building. The asking price is $400,000. The building contains 10 units, each of which rents for $500 per month. The vacancy rate is 5%. The annual expenses are $27,000. The investor feels comfortable with a 8% capitalization rate. Is the asking price reasonable for this investor? If not, what price should he offer?

An Investor Is Interested in Buying an Apartment Building