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Arya is either a real estate rock star or she is very lucky. Her revenues increase...

Arya is either a real estate rock star or she is very lucky. Her revenues increase by 20% in Year 2 and 5% each year thereafter. Her expenses increase at 2% per year. If she sells the building at 6% cap rate at the end of Year 5, what price will she get?

7) If she she sells the building for $3,000,000 at the end of Year 5, what cap rate is that?

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Answer #1

NOI is the annual income generated by the property after deducting all expenses.

Present value of property is the values at present in market.

Cap rate means NOL/Prsent value of asset

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