The cash flows below contain the year 1 cash flows for a potential real estat investment. What is the property's operating expense ratio? Year 1 Number of Units 75 Average Rent $800 Potential Gross Income $720,000 Vacancy and Collection Losses ($72,000) $648,000 Effective Gross Income Operating Expenses ($243,389) Capital Expenditures ($19,440) Net Operating Income $385,171 Annual Debt Service ($323,301) Before-Tax Cash Flow $61,870 The cash flows below provide the expected year 1 cash flows for a potential real estate investment. Based on these numbers what will the property's capitalization rate be if you expect to purchase the property for $1.3 million using a loan for 70% of the purchase price? Year 1 Number of Units 100 Average Rent $1,500 Potential Gross Income $150,000 Vacancy and Collection Losses ($10,500) Effective Gross Income $139,500 Operating Expenses ($53,010) Capital Expenditures ($5,580) Net Operating Income $80,910 Annual Debt Service ($73,842) Before-Tax Cash Flow $7,068