Question
Ali is considering buying a commercial building in Chicago. He has learned the following facts from his real estate broker: Market Cap Rate Rental
Ali is considering buying a commercial building in Chicago. He has learned the following facts from his real estate broker: Market Cap Rate Rental Income Operating Expenses Existing Annual Mortgage Payment Current rate for a 15 year mortgage 8.00% $2,500,000 $900,000 $975,000($225,000 is principal and $750,000 is interest) 5% Based on the facts above, what is the Market Price for this building?
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Step: 1
to calculate the market price of the building we can use the Cap Rate formula which is Market Price ...Get Instant Access to Expert-Tailored Solutions
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