Question

Price	$300,000	$350,000	$375,000
Effective gross income	50,000	55,000	60,000
% operating expense	50%	4 5%	46 %
NOI	25,000	30,000	32,500

. Consider the table above. Assume that the subject property has effective gross income of $53,000 and a NOI of $27,500. What value would a GIM approach yield (rounded to the nearest $100)?

(A) $32 4 ,600

(B) $325,600

(C) $328,600

(D) ) $330,000

Answer 1

Price	$     3,00,000	$     3,50,000	$     3,75,000
Effective Gross Income	$        50,000	$        55,000	$        60,000
Gross Income Multiplier (Price/Effective Income)	$         6.000	$           6.36	$           6.25
Average of Multiplier	= (6+6.36+6.25)/3
	= 6.20
Value using GIM Approach = 53000 * 6.20 = $ 3,28,600/-
So Answer is option 'C'