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Kurt is a value investor who likes to buy real estate properties that he can purchase for less than their intrinsic value. He has found
Kurt is a value investor who likes to buy real estate properties that he can purchase for less than their intrinsic value. He has found several properties with the following financial characteristics.
Property |
Listed Price |
Gross Rents |
Potential Gross Income |
A |
$2,300,000 |
$275,000 |
$216,000 |
B |
$1,850,000 |
$205,000 |
$162,000 |
C |
$2,640,000 |
$325,000 |
$225,000 |
D |
$2,050,000 |
$275,000 |
$180,000 |
The gross income multiplier for the market is 8, and the cap rate for the market is 9%. Considering the data given, which property should Kurt buy?
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