Quick and Reasonable commercial property valuation.
- George Tesfa
- Dec 5, 2017
- 1 min read
This is unofficial way of valuation but very fair.
If prime is 4.25% for example, borrower ( buyer ) has to make money after paying interest on borrowed money and maitenance. So, for
A class building, CAP rate has to be Prime plus 2% = 6.25%
B class building, CAP rate has to be Prime plus 3% = 7.25%.
C class building, CAP rate has to be Prime plus 4% = 8.25%
D class building, CAP rate has to be Prime plus 5% = 9.25%.
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