Please refer to the file 101 Conner Drive, Chapel Hill under Assignments for the remainder of this quiz. In addition to the information provided in that file, assume the following: If you buy the property, you will hold it for four years Property taxes in year 1 are 2% of the asking price Utilities and other expenses not covered by the HOA are $1.20 psf There is a tenant-in-place that occupies all of the space and has a 10-year lease Rent grows at 2% annually Expenses grow at 2% annually When you sell the property, you must pay 6% in brokerage commissions Financing is available via a loan with an annual interest rate of 6.5% that requires monthly payments and full amortization over a 25-year period The maximum LTV on the loan is 80% For the purpose of your pro forma cash flow analysis, assume that all mortgage payments are paid at the end of the year (despite the lender requiring monthly payments and amortization being monthly) and that all other expenses are paid at the end of the year. If you buy the property at the sale price listed, what is the going-in cap rate