Apartment Price Evaluation - HELP!!

Hello to all -

My partner and I have had pretty good success investing in single family homes. In our first 5 months we picked up over 10 properties. We want to take the leap and purchase an apartment. After researching quite a few properties we found a guy that wants to get rid of 5, 30 & 40 unit properties. His selling prices range from $900k to $1.1M. Now, we’re pretty excited but I doubt we’ll try to purchase all 5…we’d be happy with one.

We can easily determine the price of a single family home. How in the world do we determine if we’re getting a good deal on any of these apartments? What’s the best or most logical way to evaluate the purchase price of a property this size.

Any help would be appreciated.

Thanks in advance!!

First you need to take a good look at the income & expenses. Ideally, you will want it for the past 3 years.

To determine what your maximum offering price should be, use

   NOI / Cap rate = Max Price to the seller

So if the net operating income is $100,000 and the cap rate is 8.5% (a local commercial realtor can give you the cap rates for your area) then the most you would want to offer to pay is $1,176,470.

Other factors that would affect financing is the condition of the property, the location of the property and the vacancy.

Patti Porter

patty is on the money. if you need help with you financing, please don’t hesitate to email me.

keith palmer

where are the mutli-unit apartments properties located? I have a program that will do it for you.