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Bob wants to buy a building. He computes the annual NOI for the following year to be $275,000. The seller s asking price for the
"Bob wants to buy a building. He computes the annual NOI for the following year to be $275,000. The seller s asking price for the building is $5,000,000. Bob finds a similar building nearby which sold for $6,000,000 last year and had an NOI of $360,000. If Bob thinks the building he wants to buy should sell at the same cap rate as the similar building, how much should Bob offer?"
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