Business
Business, 13.03.2020 01:32, ddssssssdddddd

You have been asked to estimate the market value of an apartment complex that is producing annual net operating income of $44,500. Four highly similar and competitive apartment properties within two blocks of the subject prop- erty have sold in the past three months. All four offer essen- tially the same amenities and services as the subject. All were open-market transactions with similar terms of sale. All were financed with 30-year fixed-rate mortgages using 70 percent debt and 30 percent equity. The sale prices and estimated first year net operating incomes were as follows:

Comparable 1: Sales price $500,000; NOI $55,000
Comparable 2: Sales price $420,000; NOI $50,400
Comparable 3: Sales price $475,000; NOI $53,400
Comparable 4: Sales price $600,000; NOI $69,000

What is the indicated value of the subject property using direct capitaliation?

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