An investor wants to purchase an 8-unit apartment building that receives $400/month rent for each unit....
An investor wants to purchase an 8-unit apartment building that receives $400/month rent for each unit. The annual operating expense for the apartment building is $6,500. If the investor wants 9% return, what should the maximum purchase price of the property be? Show your math
Homework Answers
Net cash inflows=Annual Operating revenue-Operating expenses
=(8*$400*12)-$6,500
=$38,400-$6,500
=$31,900
Maximum purchase price=$31,900/9%
=$354,444.44
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