Question: Please help Choose a term and calculate Cap Rate, NOI, and Cash on Cash return for each. Your terms: a. 100,000 in funds b. Credit

Please help

Choose a term and calculate Cap Rate, NOI, and Cash on Cash return for each.

Your terms:

a. 100,000 in funds

b. Credit line of 200,000 (loans terms are minimum 20% down payment, LTV is 70%) at an interest rate of 4.25%

Residential Information

Purchase Price: 200,000;

After Renovation Value: 300,000;

Investment amount needed to achieve higher value: 50,000;

Comparables in the area if renovated: 315,000;

Rent: 1500.00 per month before renovations, 2500.00 after renovations per month;

Operating Expenses to include or consider: maintenance of property is about 5% of rent, 10% of rent to utilize a management, and presume tenants pay all utilities;

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!