Reference no: EM133264520
Suppose there is a "subject" property that has an expected first year NOI of $35,000. There are four comparable properties, all of which were financed with 30 year fixed rate mortgages and 70% debt, 30% equity. The sale prices and estimated first year NOI for each are listed below:
Comparable 1: Sale Price - $250,000, NOI: $100,000
Comparable 2: Sale Price - $236,000, NOI: $30,680
Comparable 3: Sale Price - $400,000, NOI: $28,000
Comparable 4: Sale Price - $350,000, NOI: $35,000
What is the indicated value of the subject property using direct capitalization? Write down any formula(s) you use. PLEASE ROUND ALL DECIMALS TO 2 PLACES!