A building offered for sale currently collects $11,000 per month. All units are occupied. The owner claims there is no vacancy within the past 2 years. The listing shows expenses of $2,000 per month. The Property is offered for sale based on the owner's NOI and a 4% CAP RATE.

Your assumptions are as follows:

Market rents are 20% higher

Vacancy and collections will be 5%

Operating Expenses are 35% of pro forma EGI

You feel a fair CAP RATE based on your PRO FORMA is 4.5%

What is the listing price?

What is the Owner's Operating Expense Ratio?

What is your Pro Forma EGI?

What is your PRO FORMA NOI?

What is your PRO FORMA Valuation?