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Estimate the Cap Rate using the BAND OF INVESTMENT Method in order to estimate the value of a Rental Property using a Loan to Value

Estimate the Cap Rate using the BAND OF INVESTMENT Method in order to estimate the value of a Rental Property using a Loan to Value Ratio of 75% for a 25 years Mortgage at fixed annual rate of 6%. The investor’s required return on equity is 13%. According to your calculations, What is the required Cap Rate ?

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