The NOI for the first year of your property is expected tobe $100,000, and grow at 5% per year. You financedthe property with a $500,000 mortgage at 8% and anamortization term of 20 years. If the selling costs are 5%and the outgoing cap rate is 10%, what is the before taxequity reversion if you sell at the end of year 5?

First, calculate the monthly mortgage payment: r=0.08/12 =0.00666667 n=20×12=240…

Answered: The NOI for the first year of your…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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