You are given the following information about an apartment building: Number of units 40
Monthly rent per unit $1,000
Vacancy and collection losses 5% of PGI
Operating expense ratio 50%
Price of the property $3,000,000
Interest only loan with 6% interest and 2 discount Financing with a 70% LTV ratio:
points
What is the capitalization ratio at which this property was bought?
a) 7.6%
b) 11.0%
c) 9.5%
d) 8.8%
e) 6.5%