Question
Determine pros and cons of investing into this property based on the following values: NOI Year 1 $20,795.76 Asking Price $510,000 Before Tax Cash
Determine pros and cons of investing into this property based on the following values:
NOI Year 1 | $20,795.76 |
Asking Price | $510,000 |
Before Tax Cash Flow Year 1 | -$25,930 |
Equity Invested | -$127,500 |
Effective Gross Income | $37,810.48 |
Operating Expense | -$15,124.19 |
Mortgage Amount | $382,500 |
Debt Service | -$46,725 |
Capitalization Rate | 4.08% |
Equity Dividend Rate | -20.34% |
Net Income Multiplier | 24.52422782 |
Effective Gross Income Multiplier | 13.4883253 |
Operating Expense Ratio | 0.4 |
Loan to Value Ratio | 0.75 |
Debt Coverage Ratio | 0.4450639909 |
Step by Step Solution
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Step: 1
Pros of investing in this property 1 Positive Net Operating Income NOI The property generates a positive NOI of 2079576 in Year 1 This indicates that ...Get Instant Access to Expert-Tailored Solutions
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Step: 3
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
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