The subject property has a potential gross income (PGI) of $…
The subject property has a potential gross income (PGI) of $100,000, a vacancy and collection loss of 7%, fixed expenses of $35,000, variable expenses of $25,000, and reserves for replacement of $7,000. Recent sales of very similar properties in this market suggest that a capitalization rate of 12.0% is appropriate. The capitalization rates were extracted from sales in which the prices was divided into the estimate of net operating income from the broker without reserves. What is the market value of the subject property?