An investor is considering the purchase of a residential rental property that has an asking price of $400,000. The property has four rental units that are expected to rent for $1,200 each per month.
Operating expenses and vacancy allowances are expected to be 45% of gross income.
A 5% interest only mortgage loan is available for 5 years at 100% of the purchase price.
How much cash income will the investor receive each month of the first year after paying the monthly mortgage payment?
A. $2,640
B. $ 973
C. $1,361
D. $1,667