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Real Estate Principles 3rd Edition by David Ling,Wayne Archer
Edition 3ISBN: 978-0073377322Real Estate Principles 3rd Edition by David Ling,Wayne Archer
Edition 3ISBN: 978-0073377322 Exercise 18
Use the following information to answer questions 1-3.
You are considering the purchase of an office building for $1.5 million today. Your expectations include the following: first- year potential gross income of $340,000; vacancy and collection losses equal to 15 percent of potential gross income; operating expenses equal to 40 percent of effective gross income; and capital expenditures equal 5 percent of EGI.
What is the estimated going-in cap rate ( R o ) for the first year of operations
You are considering the purchase of an office building for $1.5 million today. Your expectations include the following: first- year potential gross income of $340,000; vacancy and collection losses equal to 15 percent of potential gross income; operating expenses equal to 40 percent of effective gross income; and capital expenditures equal 5 percent of EGI.
What is the estimated going-in cap rate ( R o ) for the first year of operations
Explanation
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Estimated going-in cap rate (R o ) can b...
Real Estate Principles 3rd Edition by David Ling,Wayne Archer
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