question archive If the cap rate on a property is 12% and loans are available at an 11% mortgage constant then what is the expected income component on the before-tax return (i
Subject:FinancePrice: Bought3
If the cap rate on a property is 12% and loans are available at an 11% mortgage constant then what is the expected income component on the before-tax return (i.e., cash-on-cash return) if the investor borrows 80% of the property price? The mortgage constant is the "mortgage capitalization rate" and defined as the annual amount of debt service to the...