Bob buys a property that costs $1,000,000. The property is projected to generate NOI as follows: YearNOI1$100,0002$105,0003$110,000
Fantastic news! We've Found the answer you've been seeking!
Question:
Bob buys a property that costs $1,000,000. The property is projected to generate NOI as follows:
YearNOI1$100,0002$105,0003$110,000
Bob will own the property for two years.
Bob will sell the property at the end of year 2 at a cap rate that is 250 basis points lower than the cap rate at which he bought the property.
Assume Bob finances his purchase with a 50% LTV Fixed Rate IO loan at an annual rate of 5% with annual compounding and annual payments.
What is Bob's annualized IRR for the investment in question?
Expert Answer:
Posted Date:
